The EUR/USD pair extended gains into a fourth consecutive day on Thursday following the European Central Bank's (ECB) decision to raise its main rates by 25 basis points, as expected.
At the time of writing, the EUR/USD pair is trading at the 1.0880 area, recording a 0.7% daily gain, having touched its highest level in a month at 1.0894.
The European Central Bank announced its decision to raise the main financing rate to 4.00%, the marginal lending to 4.25% and the deposit facility rate to 3.50%. In the subsequent speech, ECB President Christine Lagarde fueled the hawkish narrative as she stated the board is "not thinking about pausing."
Meanwhile, the Federal Reserve decided to skip a rate increase on Wednesday after ten consecutive increases. However, the dot plot and Chair Jerome Powell's hawkish words slammed prospects of rate cuts for the remainder of the year.
From a technical perspective, the EUR/USD pair's short-term bias is bullish, according to indicators on the daily chart, while the price has managed to climb back above the 20- and 100-day simple moving averages (SMAs) and now challenges the critical 1.0900 resistance area.
A break above the psychological level could fuel bullish momentum and send the EUR/USD to retest the 1.0970 resistance zone ahead of 1.1000. On the other hand, the 100-day SMA at around 1.0805 is the key support to watch as a drop below would deteriorate the short-term outlook, exposing the 1.0700 zone en route to May's lows at 1.0635.
