The EUR/USD has soared more than 70 pips above $1.0815. The pair has traded exactly as we shared in our weekly analysis report today. Although mostly due to technical analysis, in the European session, the release of IFO business climate from Germany extended an additional support.
IFO Business Climate
For the month of March, the German IFO business climate index increased to 112.3, compared to February figures of 111.0. Not only that, it also exceeded expectations of a modest rise to 111.1 for the month. Thus, the positive figures are building strong sentiments of contractionary monetary policy. At the same time, we simply can't ignore the ongoing political activities in different areas of the Eurozone.
EURUSD- Hourly Chart
Technical Outlook
In the 1-hour chart, the technical side remains the same as the pair edged higher after violating double top resistance level of $1.0815. However, I'm concerned about the gap; I can't say when EUR/USD will plunge to fill it. The plunge could occur tomorrow, or the day after tomorrow, but I'm not sure!
Currently, the pair has entered into overbought territory as per the RSI above 71 and stochastics at 89; signaling buyers should wait a bit for a slight retracement before they enter a new position. I am looking to take profit at $1.0960 this week.
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