Euro holds gains above 1.1600 on ECB tightening prospects
The EUR/USD pair trades with mild gains around 1.1625 during the early Asian session on Tuesday. The Euro (EUR) strengthens against the US Dollar (USD) amid expectations of a rate hike from the European Central Bank (ECB).
The Euro (EUR) strengthened against the US Dollar (USD) as traders anticipate a rate increase from the European Central Bank (ECB). The ECB raised its benchmark rate in June and is poised to do so again at its meeting on Thursday, with a target of raising the deposit rate from 2.25% to 2.5%. ECB President Christine Lagarde is expected to refrain from giving much away at her press conference following the rate decision, emphasizing that future decisions will be data-driven.
Meanwhile, the US reported a stronger-than-expected jobs report in August, adding 162,000 jobs, which pushed Federal Reserve (Fed) rate-hike expectations above 60%. Additionally, tensions between the US and Iran could potentially drive investors towards safe-haven assets like the US Dollar. Technical analysis indicates a bullish bias for EUR/USD, with the pair trading above the Bollinger middle band and the 20-day SMA, while resistance is seen at the Bollinger upper band near 1.1710.
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