EUR/USD Exchange Rate Rally Fueled by Weakening Dollar and Resilient Momentum
From its low of 1.0537 in February, the EUR/USD exchange rate has shown remarkable upward momentum, propelled by a weakening US Dollar. The pair has broken above the key round number resistance level of 1.0700 on the daily chart, but is now finding resistance at the 50-day simple moving average (SMA) at 1.0727.
The pair still has room to grow as long as declining US Treasury bond yields keep the US dollar in check. If the 50-day moving average (DMA) is decisively broken, the next support zone and the important psychological milestone of 1.0800 may be reached. Contrarily, the 21-day moving average (DMA) and yesterday’s low around 1.0645 will likely act as support for the euro against the dollar.
Indicators like the Relative Strength Index (RSI) that are now in the low to mid 50s suggest that the EUR/USD pair still has room to rise. The repercussions from Silicon Valley Bank may maintain the US Dollar on a downward trend due to waning wagers for aggressive rate hikes from the Federal Reserve (FED). The next major event to keep an eye on for the pair is the US Consumer Price Index (CPI), which will provide context for the upcoming March 22 FOMC meeting
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