EUR/USD Awaits Interest Rate Hike

The market's most traded currency pair began July with a consolidation around 1.0900. On Friday EUR/USD is hovering near 1.0890.
 
Investors continue to monitor the situation around the interest rates of global central banks, mainly the US Federal Reserve and the European Central Bank. The Fed is already expected to raise interest rates by 25 points in July as part of efforts to combat inflation. As for the ECB, it is pursuing its own approach to monetary policy tightening.
 
The minutes of the Federal Reserve, published this week, confirmed further rate hikes. According to CME FedWatch, the likelihood of realising such a scenario is almost 90%.
 
Today, market participants are focused on the US employment data for June.
 
Technical analysis of EUR/USD
 
On the H4 chart of EUR/USD, buyers successfully avoided breaking below the support level at 1.0835 for the third time. A wedge reversal pattern is forming near it. If the price crosses above the upper boundary of the pattern and secures above the level of 1.0935, it is expected to rise to 1.1065. Technically, this scenario is confirmed by the MACD: a bullish divergence has been formed on it, which suggests the development of an uptrend.
 

 
On the H1 chart, EUR/USD continues to develop a sideways pattern between 1.0835 and 1.0905. There are no signals confirming growth from the MACD indicator. However, an inverted head and shoulders pattern is forming on the chart. The completion of the pattern is expected with a breakout of 1.0905. The growth target will be the level of 1.0960. A negative scenario for buyers would be a break below the support area with the price consolidating under 1.0835.
 

 
Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.