Euro Consolidates Around 1.16 After Multi-Year High

Euro Consolidates Around 1.16 After Multi-Year High

The Euro (EUR) is consolidating within a narrow band near the 1.1600 level on Wednesday, following a brief climb to a multi-year high not seen since September 2021.

Support from Central Bank Divergence

The sustained strength in the EUR/USD pair is primarily attributed to a growing divergence in central bank policy expectations. While the European Central Bank (ECB) has adopted a more balanced outlook, the Federal Reserve (Fed) continues to face mounting pressure for policy easing, fueling investor optimism for the Euro.

Short-Term Outlook: Tight Range with Upside Bias

Despite today’s modest pullback, the technical structure remains bullish. Continued signs of economic resilience in the Eurozone and softening data from the US could extend the Euro’s bullish bias, especially if markets maintain their dovish Fed expectations.

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