Hawkish ECB Minutes Fuel Growth ConcernsYesterday’s ECB meeting minutes clearly highlighted the extent to which the bank has turned hawkish. The minute showed the bank focusing on inflation concerns and the need to tackle rising consumer prices. Indeed, many policymakers were seen calling on the need for more aggressive action and a frontloading of rate hikes. The minutes noted that “in view of the baseline inflation projection exceeding the ECB’s target at the relevant horizon, together with the large and persistent upside risks, it was suggested that the ECB needed to respond more strongly than implied by the market expectations”With the chances of a larger (.25% +) rate hike this month growing, traders are now fearing over the impact the projected tightening will have on growth in the eurozone. With inflation soaring, supply issues still a major threat and the ongoing impact of the war in Ukraine, EUR is trading lower on the back of yesterday’s minutes as recessionary fears weigh on the single currency.Technical ViewsEURUSDThe pair has been trending lower within a bear channel over the course of the year. Price has recently broken below support at the 1.0364 level and, while below here, the focus is on a test of the .9885 level support next, in line with bearish MACD and RSI readings.
Source: Tickmill