The benchmark ECB rate is now at 3.75%, at levels not seen since November 2008.

Inflation remains the big issue and, according to the IMF, may be an issue until the levels return to normal in 2025. The rise in rates has hit growth with the eurozone economy growing less than expected in the first quarter of the year, just 0.1%.

IGTV’s Jeremy Naylor looks at EUR/USD, EUR/GBP, and the DAX.

EUR/USD

Let's take a look at the way in which the charts have moved to be frank, there hasn't really been much of a move. This is the euro/dollar trade, the vertical dotted line on the left hand side of the screen here was when the European Central Bank started to raise rates back in July 2022. And it brought the main referee rate from a negative 0.5% right the way through to zero.

And then subsequent to where we are now at three and a quarter percent, estimates published last week by the International Monetary Fund suggested inflation won't reach the ECB's target until 2025. So that's why we still think potentially there is more upside to go. The big question is, is there more upside to go for the eurozone than there is for the US and the Federal Reserve?

There were some indications yesterday, the Federal Reserve likewise thinking that there is still upside to go on inflation, but they could well end up pausing. But European Central Bank seems to me to be a little bit more dynamic in its potential upside.

I want to show you 30-minute candles just to show you where the decision came through from. And that was a drop there in the euro against the US dollar. Since then, there has been this recovery just returning to the daily candles. You can see we're bumping up against this line of resistance at 11096.

I was talking about this, this morning in the Early Morning Call and I will continue to monitor this right the way through next week. We've got the Bank of England next Thursday, of course. But my price target is up here, the 1118 level when I get a candle closed beyond the 11096 and that will take it up to levels not seen since the 31st of March.

EUR/GBP

Let's look at what's happening with the euro against sterling. A little bit of an opposite sort of trade. Really, I'm thinking this is likely to go lower rather than higher and the euro has got this line of support down here below where we are at 87.29 pence currently trading half a penny above that at the moment at 87 84.

DAX

Just to look at the German DAX. To be Frank with you, not really much move. If anything, we've got a little bit of a curling over the deck. Now, the MACD pointing lower indicating to me, potentially there is more some downside to go. If you are short on this, your stock would go above the recent highs at around about the 16,000 level. We currently trading 15,722.

Our price targets down here at this sort of area of support down here, which would be anything from the 100-period moving average down here at 15,200 all the way down to the bottom here, 14,490. So there is a band of support below where we are.

I think there's more weakness to go on the German DAX in the next few days. We'll be back in the Early Morning Call on Friday morning to monitor the progress of these markets.