The hawkish expectations | 09 Juni 2022

09 Juni 2022, EUR/USD

The hawkish expectations

EURUSD trading plan:

Money markets ramped up their bets on European Central Bank interest rate rises on Wednesday to price in more than 75 basis points of hikes by September. With the bank largely expected to start rises in July and move in 25-bp increments, the pricing implies traders now expect its hikes to include a rare 50-bp move at a single meeting by September, brought forward from the October timing. Traders have steadily ramped up their bets on ECB hikes following a higher-than-expected euro area inflation report last week, which boosted the case for larger moves from the central bank. Several policymakers have said they are open to a 50-bp move.

Investment idea: buy 1.0690 and take profit 1.0740.

David Johnson
Analyst of «FreshForex» company
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