EUR/USD has surged over the past week reaching its key resistance levels. Oscillators also show that the asset is overbought.
Over the last couple of days there have been more hawkish comments from the Fed’s representatives. Officials are hinting that rate hikes may continue in order to curb inflation. But the pace of economic growth is going to be a bit slower.
Therefore, EUR/USD is likely to see a corrective pullback in the short run.
The target for the correction could be the upper limit of the uptrend, recently broken by the euro. It is roughly the level of 1.02.
A stop may be placed beyond the local high reached today.