The USD's decline has contributed to the Euro's rise

Euro breakthrough after USD plunge

By Laila Eid | @Laila Eid | 23 March 2023

  • Fed hikes rates by 25 bp

  • EUR/USD successfully rises above the 1.09 level

  • The Federal Reserve confirms that it has the necessary tools to protect depositors' funds

Euro Rises as US Interest Rates Increase

The euro has experienced a strong rise due to the decline in the US dollar index. Taking advantage of this decline, the euro-dollar pair reached trading levels of $1.0918. This came after the Federal Reserve announced its second interest rate increase of the year, marking the ninth consecutive time that the bank has increased interest rates by a quarter of a percentage point as part of its monetary tightening pace.

Jerome Powell commented on the recent crisis that hit the banking sector, pointing out that individual bank problems can threaten the banking system if not properly addressed. He also emphasized that the Federal Reserve has the necessary tools to protect depositors' funds.

Key technical levels for the EUR/USD pair:

The pair has succeeded in achieving a rise surpassing the resistance level of 1.0800, which contributed to the extension of the rise to record the highest price of the day at around 1.0930. It is likely that the rise will continue to test the resistance level of 1.1034, which the pair recorded in February of this year and was the highest peak for the euro in 2023. If it surpasses this level, the rise may extend for the euro to record a new peak around the level of 1.1160.

As for the strong support level for the euro against the dollar, it will be at the level of 1.0750, which was a turning point for it in the current rise. It is important for prices to stay above it to prove the intention to rise. But if the pair falls below the level of 1.0750, it may extend the declines to test the level of 1.0650, then the strongest support at 1.0530.

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