(Kitco News) - Money markets were pricing in roughly a 75% chance of the European Central Bank (ECB) hiking interest rates by 75 bps and the central bank did not disappoint. After the ECB hike, the statement said that there is an expectation that the ECB will continue to hike in the coming months to combat inflation which remains above the target level (2%). There was the caveat that that will also be data dependent.
looking at the 4-hour chart below there was not much of a short-term reaction in the EUR/USD pair. There is a flag-type pattern formation on the chart but at the moment it does not look like the floor or ceiling is under threat. The red line represents the parity level and it seems like the pair is stuck there for now but a break of the chart structure could provide clues to the future trajectory of the pair.
