Euro continues to rise as ECB representatives discuss further actions on interest rates. In a recent interview, Governing Council member Klaas Knot stated that the central bank should carry on with the increase of rates, as core inflation remains excessively high, which is bad for households and businesses.

Last Thursday, the European Central Bank raised the deposit rate by a quarter point to 3.25%, and the key interest rate jumped to 3.75%. This was the lowest increase after three consecutive rises of 0.5% each. ECB President Christine Lagarde also hinted that more hikes should be expected in the future, albeit at a less aggressive pace.

The action was not surprising as the latest data showed that core consumer prices in the eurozone rose 5.6% in April compared to the previous year, just 0.1% below the record 5.7% in March. Knot said that he sees the ECB achieving its 2% inflation target around 2025.

In terms of the forex market, euro bulls still have a chance to continue a rally. But in order to do so, the quote has to stay above 1.0960 and take control of 1.1000. This will allow a rise beyond 1.1030, heading towards 1.1060. In case of a decline around 1.0960, the pair will fall to 1.0940 and 1.0910.

In GBP/USD, bulls are also controlling the market. But to see further growth, the quote has to consolidate above 1.2630 as only that will trigger a much larger rise to 1.2665 and 1.2710. In case there is a decline, bears will attempt to take 1.2600, which could lead to a fall to 1.2560 and 1.2520.