EUR/USD Gains Amid Weaker Dollar and Key Technical Levels: A Market Overview

The EUR/USD experienced an increase on Tuesday, maintaining its position above the critical 1.0900 area and significant technical benchmarks. A declining US Dollar propelled the currency pair, which exhibited minimal fluctuations during the American trading session. The upcoming sparse economic calendar could lead to limited price swings, particularly if the pair stays below 1.1000.

The German ZEW survey for April presented mixed results. The Current Situation Index improved from -46.5 to -32.5, exceeding expectations, while the Economic Sentiment Index unexpectedly dropped from 13 to 4.1. The final reading of the Euro Zone’s March Consumer Inflation report is due on Wednesday and is unlikely to impact markets. Additionally, the February Current Account and Construction Output are scheduled for release, and European Central Bank members Lane and Schnabel are set to speak.

The US Dollar weakened on Tuesday, with minimal changes in US yields and mixed Wall Street performance. US housing sector data showed both positive and negative developments. The Federal Reserve (Fed) plans to release the Beige Book on Wednesday, and recent remarks from Fed officials suggest the possibility of one more rate hike.

Market participants now anticipate the European Central Bank (ECB) to raise rates beyond May, as Fed rate cuts are no longer expected. Euro Zone yields increased on Tuesday, lending support to EUR/USD . The German 10-year yield settled at 2.49%, its highest since March 9, while the US 10-year yield experienced a slight decline to 3.57%.

Technical Overview:

The daily chart shows that the EUR/USD remains above a rising 20-period Simple Moving Average (SMA) at 1.0895. To pave the way for more medium-term gains, the pair must firmly hold above 1.1000. A drop below 1.0850 would undermine the outlook, likely leading to a test of the critical 1.0760 support level.

Before the Asian trading session, the 4-hour chart reveals EUR/USD above an ascending trend line but beneath the 20-period SMA. The upward bias is present, but signals are mixed. Momentum is heading downwards, while the Relative Strength Index remains neutral at 50. A move above 1.0990 could bolster the Euro’s momentum for another push towards 1.1000. Consolidation above this level would shift focus to the next resistance at 1.1045. On the other hand, a decline to 1.0950 might occur during the following session. If it falls further, the pair could reach 1.0920. The bias remains positive as long as it stays above the vital dynamic support at 1.0895.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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