- Today’s strong data from the U.S. helps greenback gather strength.
- US Dollar Index remains on track to close second straight day higher.
- Annual CPI in Germany rises to 1.6% in February.
The EUR/USD pair rose to its highest level since February 5 at 1.1420 earlier in the day but failed to preserve its momentum in the second half of the day. As of writing, the pair was virtually unchanged on a daily basis at 1.1372.
The broad USD weakness during the European trading hours allowed the pair to puısh higher above the 1.14 handle. However, with the U.S. Bureau of Economic Analysis in its initial estimate announcing that the real GDP is seen expanding 2.6% in the fourth quarter and the ISM-Chicago’s PMI rising to its best level in 14 months, the dollar started to outperform its rivals and forced the pair to retrace its daily advance. At the moment, the US Dollar Index is up 0.1% on the day at 96.20 and looking to close the second straight day in the positive territory.
Additionally, following impressive upsurge, the 10-year US T-bond yield extended its rally and climbed to its highest level in more than three weeks to provide additional support to the buck.
On the other hand, Destatis today reported that the annual CPI (preliminary) in February in Germany rose to 1.6% from 1.4% in January and surpassed the market expectation of 1.4%, but was largely ignored by the market participants.
Technical outlook by FXStreet Editor Pablo Piovano
The ongoing bull move in EUR/USD is expected to meet quite a tough hurdle in the 1.1440/50 band, where are located a Fibo retracement (of the September-November drop) and the short-term resistance line (off September highs beyond 1.1800). This is considered the last defence for a potential re-visit to the 1.1500 neighbourhood and beyond. On the downside, recent lows in the mid-1.1300s appear reinforced by another Fibo retracement (at 1.1356), the 21-day SMA (at 1.1350) and the 10-day SMA (at 1.1342). On a broader picture, the critical 200-week SMA (at 1.1335) is a strong support and is expected to hold the downside on a resumption of a bearish move. As long as this area caps, the near term outlook for the pair should remain constructive.
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