- EUR/USD rises to highest level in 20 days on the back of a weaker US dollar.
- Technical outlook point to further gains.
The EUR/USD broke decisively above 1.1370 during the US session and reached at 1.1402, the highest level since February 6. So far, the euro failed to extend the run above 1.1400 but it was holding near the top, consolidating a daily gain of 35 pips and on top of the 1.1370 area and the 20-day moving average. Today’s move higher represents an extension of the rally that started last week from monthly lows at 1.1230.
On American hours, the greenback lost ground across the board. The DXY dropped to 96.00 and it was having the worst day in a month. US yields move lower and the 10-year was at 2.63%, slightly above February lows. Also, some technical factors contribute to the latest leg higher.
Data ahead
On Wednesday, US President Trump will meet with North Korean leader Kim Jong Un. Regarding data, trade numbers for December, pending homes sales for January and factory orders for December are due. Earlier in the Eurozone, consumer confidence numbers will be released. Fed’s Powell will be back at Congress to testify before another committee. Tuesday’s comments from Powell had no significant impact on the US dollar.
Technical outlook
“The pair holds near 3-week highs ahead of the Asian opening, nearing the 61.8% retracement of the 1.1513/1.1233 slide at 1.1410, and poised to extend its gains, should bulls manage to break the mentioned resistance, as in the 4 hours chart, technical indicators accelerated north within positive levels, as the price extends above all of its moving averages for the first time since the beginning of the month”, says Valeria Bednarik, Chief Analyst at FXStreet.
She noted that the 100 and 200 SMA maintain their downward slopes, while the 20 SMA advances, already above the 100 SMA, skewing the risk to the upside. “Beyond the mentioned Fibonacci resistance, the 1.1450/60 area is the next possible bullish target.”
Share
