EUR/USD Price Analysis: The pair breaks out of the consolidation range and rises to fresh daily highs at 1.0940

• EUR/USD has produced a bullish breakout of the 20 pip range formed above 1.0900.
• The ECB has confirmed that more interest rate hikes are expected due to the persistence of core inflation.
• EUR/USD has shown a slight correction after confidently scaling above the 61.8% Fibonacci retracement at 1.0920.

The EUR/USD pair is coming out of losses as the US Dollar Index (DXY) has faced significant barriers around 102.60 on the European open. The pair has broken out of the consolidation formed in a tight 20-point range and has just risen to new daily highs at 1.0940.

The S&P 500 futures have extended losses in the European session amid caution due to a long weekend in the US. Meanwhile, investors are looking for a possible trigger to trigger action in the currency arena.

In the Eurozone, further interest rate hikes are expected from the European Central Bank (ECB), despite the threat to the economic outlook. ECB President Christine Lagarde has confirmed that further interest rate hikes are expected due to persistent core inflation.

He EUR/USD has shown a slight correction after safely clearing the 61.8% Fibonacci retracement (traced from 26 Apr high at 1.1095 to 31 May low at 1.0635) at 1.0920. The 20 period EMA at 1.0910 provides a cushion for Euro bulls.

The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, indicating that bullish momentum is already active.

We will see more gains in the pair on a break above the May 02 low at 1.0942which will push the asset towards psychological resistance in 1,1000 and at the maximum of May 8 in 1.1054.

In an alternate scenario, a break below the 50% Fib at 1.0865 will drag the pair towards the 38.2% Fib at 1.0813 followed by the June 14 low at 1.0775.

EUR/USD four-hour chart