FxWirePro: Daily Commodity Tracker - 21st March, 2022 
The euro started 2018 on a stronger note despite the following factors,
- U.S. Federal Reserve has projected three more rate hikes in 2018 after hiking interest rates three times in 2017. The market is already pricing two rate hikes in 2018; one in March and one in September and pricing the third hike in December 2018 with 45.7 percent probability. So there isn’t much that dollar could find support from in terms of rate hikes.
- The European Central Bank will be purchasing €270 billion worth of European debt in an extended asset purchase program until September this year.
- Europe’s biggest powerhouse Germany is still suffering from a political crisis. No government has been formed since the election in September.
- Spain undergoing a crisis as the people of Catalonia, in its General election voted in favor of political parties that have been demanding separation from Spain to form a separate state of Catalonia.
Despite the above factors, euro has moved higher and now trading at 1.203 and we expect the upward momentum to continue. It looks more likely that the euro would test the crucial level of 1.25 against the USD with two interim stopovers at 1.225 and at 1.24 area.
We don’t expect the euro to breach 1.15 before the 1.25 area is tested.
