Jakarta, GIC Trade – The euro hit a seven-month high against its U.S. dollar on May 31, with the major currency pair touching $1.07765 as the greenback weakened recently on expectations that the Federal Reserve will not need to raise interest rates as quickly and as high as previously thought to curb inflation.

On the other hand, the strengthening of the euro was also supported by statements from European Central Bank (ECB) officials who were mostly hawkish. French central bank Governor Francois Villeroy de Galhau said the ECB should aim to reach its inflation target by the summer, confirming that they would have to raise interest rates further in the coming months.
 
While Austrian central bank Governor Robert Holzmann chose a more aggressive stance, noting that "interest rates would have to rise significantly further to ensure a timely return of inflation to the target".
 
Finally, ECB Governing Council member Olli Rehn said that interest rates in the Eurozone would still have to rise significantly in the next few meetings and reach a level that is limited to dampening inflation.
 
The greenback has lost nearly 12 percent against the euro since hitting a 20-year high in September.
 
Fundamentally, hawkish statements from European Central Bank officials have supported the euro's move higher. So how about technically, see the following analysis:
 
Technical Analysis



To continue the uptrend or bullish, the EUR/USD pair needs to pass the resistance area at 1.07980 first with the next resistance at 1.08200. Further increases have been supported by the MA200 indicator which has been crossed by the MA50 line from below.
 
Meanwhile, to change the bias to bearish, it is necessary to break the 1.07250 area first with the next support target at the 1.06770 level. A decrease or correction in gold prices is potential amidst the RSI and MACD indicators which are already in the overbought area.
 
Today's Forex Analysis is a fundamental and technical view used by the author, not a suggestion or invitation. For more information, click the image below.