Jakarta, GIC Trade – The euro currency was observed to rebound amid market participants' expectations that the US central bank (US Federal Reserve/The Fed) will raise its benchmark interest rate by only 25 basis points (bps) at next week's meeting.
 
Meanwhile, the European Central Bank (ECB) has committed to raising its benchmark interest rate by half a percentage point or 50 basis points (bps) at the next policy meeting.
 
In addition, the positive sentiment of the euro was also supported by a data report that showed that euro zone business activity surprisingly returned to moderate growth in January.
 
German business activity according to Ifo Institute survey data released last Wednesday, increased in January with a reading of 90.2 from 88.6 in the previous period. Meanwhile, US activity actually contracted for seven consecutive months.
 
Nevertheless, the euro's strength became limited after the US economy grew more than expected during the fourth quarter (Q4) of 2022. Where the US gross domestic product (GDP) increased by 2.9% from the forecast of only 2.6%.
 
Fundamentally, the ECB's hawkish statements and the release of data on eurozone business activity, which grew more than expected, could support the single currency to strengthen again. Then how technically, see the following analysis:
 
Technical Analysis



The EUR/USD pair in the 15-minute period has a chance to rise towards the level of 1.09114 -1 1.09170, the nearest resistance of the euro to continue the rise, needs to pass through the 1.08994 area first. However, the EUR/USD rally will be limited after reaching the 1.09170 level and is likely to correct again towards the 1.08274 support.
 
In addition, a limited increase is also confirmed from the RSI indicator which will touch the overbought area at the 70 RSI level, so EUR/USD tends to consolidate towards the 30 RSI level in the price range of 1.08781 – 1.08274.
 
Forex analysis today is a fundamental and technical view used by the author, not a suggestion or a solicitation. To get more information click on the image below.