EUR/USD: Hawkish message by the ECB could steer Euro over 1.06 – SocGen

EUR/USD maintains bid tone around 1.05. Hawkish ECB hike and QT plan could spark buying through 1.06, economists at Société Générale report.

200DMA at 1.0350 is near term support

“Optimism of a shallower recession in the euro area and a hawkish message by the ECB on Thursday could steer EUR/USD over 1.06. Next potential hurdle is at the March 2020 low of 1.0630/1.0690.”

“Technically, the return over the 200-Day Moving Average at 1.0350 in mid-November supports the view that the tide has turned.”

“A stronger Euro would lighten the burden on the ECB in its battle against inflation via commodity prices and nonenergy/industrial goods priced in Dollar.”