EUR gains on 50 bp rate hike rumors

Euro is one of the best performing major currencies today. Common currency jumped after media reports surfaced hinting that ECB may move out of negative rate territory as soon as this week. Reuters reported that ECB members are discussing whether to deliver a 25 or 50 basis point rate hike during a meeting later this week (Thursday). The latter option would see ECB deposit facility rate move up from current -0.50% to 0.00%. Money markets are currently pricing in a 60% chance of a 50 basis point move. However, it should be noted that Reuters hinted that discussions are ongoing, not that decision was made. Having said that and given historical dovishness of ECB, chances that ECB will stick with a 25 basis point rate hike remain high.

EURUSD jumped to 1.0250 as ECB rate hike odds continue to mount. The pair reached a daily high near 1.0253 - the highest level since July 6, 2022. An important technical development to note is that EURUSD managed to break above the upper limit of the Overbalance structure, hinting that the downtrend may be about to end. 

Source: xStation5