and the European Central Bank make their first decisions of the year. After soaring to a multi-month high of 1.1031 on Thursday, the pair plunged to a 1.0800 .made its first interest rate hike of the year. It hiked rates by 0.25% to between 4.50% and 4.75%, the highest level in more than a decade. It also maintained a hawkish tone and pointed to more hikes later this year.
The ECB then delivered its first rate hike of the year on Thursday. Unlike the Fed, the ECB decided to hike by 0.50%, bringing the main interest rate to 3.25%. Therefore, with the spread between America’s and European rates being high, economists expect that the ECB will continue hiking.These numbers showed that the labor market continued to strengthen in January even as many tech companies like Microsoft, Salesforce, and Amazon announced mass layoffs.
Therefore, with the labor market strengthening, economists expect that the Fed has the impetus it needs to continue hiking interest rates.The EUR/USD price has been in a strong downward trend after the latest American jobs numbers. As it dropped, the pair moved below the first support of the standard pivot point at 1.0830. It also declined below the lower side of the ascending channel shown in black.while the Relative Strength Index moved below 40 and is approaching the oversold level of 30. Therefore, the pair will likely continue falling, with the next key support being at 1.073 .The EUR/USD pair made a bearish breakout on Friday and moved below the 38.2% Fibonacci Retracement level.
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