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Feb 23 - 12:55 PM

HSBC: Key EUR/USD and EUR/GBP Levels Ahead of ECB March Meeting

By eFXdata  —  Feb 23 - 11:50 AM

Synopsis:

HSBC highlights critical levels for EUR/USD and EUR/GBP as the market anticipates the European Central Bank's (ECB) meeting in March. For EUR/USD, the 1.07 mark has emerged as a significant support point throughout February, expected to hold unless the ECB alters its communication tone. A steadfast approach from the ECB could see EUR/USD staying within a range, potentially reaching up to 1.0930. Should the 1.07 support level be breached, the market might quickly aim for 1.05. In the case of EUR/GBP, an ECB shift towards a more dovish stance could lead to a renewed test of the 0.85 level.

Key Points:

  • EUR/USD Stability: The 1.07 level serves as crucial support, with potential upward movement capped at 1.0930 in the absence of significant ECB language changes.

  • EUR/USD Downside Risk: A break below 1.07 could swiftly shift market focus towards the 1.05 target.

  • EUR/GBP Outlook: A dovish turn from the ECB might trigger an attempt to breach the 0.85 mark.

Conclusion:

Market participants are closely monitoring the ECB's upcoming March meeting, with specific attention to its impact on EUR/USD and EUR/GBP. The current technical setup suggests significant support and resistance levels, which could define the trading ranges for these pairs based on the ECB's communicated stance.

Source:
HSBC Research/Market Commentary

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