The EUR/USD pair is trading at approximately 1.0460 as Wall Street prepares to open, showcasing a recovery from its earlier dip below the 1.0400 threshold. On Monday, the currency pair briefly fell to a low of 1.0387 before regaining momentum. This recovery is attributed to a more optimistic market mood, which has also put the US Dollar on the defensive. The pair's recent performance suggests a potentially sustained upward movement, with traders eyeing further intraday gains.
On Monday, the EUR/USD pair managed to extend its daily recovery, trading above the 1.0450 mark. This upward movement was supported by its advance beyond the mildly bullish 20 Simple Moving Average (SMA), which now acts as a dynamic support level around 1.0425. This technical indicator suggests that the pair has some underlying strength in its current rally.
However, resistance remains in place, highlighted by the bearish 100 SMA in the 1.0530 area. This level could pose challenges for the pair’s further ascent. Nevertheless, on the four-hour chart, the EUR/USD pair is trading above all its moving averages, indicating a favorable technical setup for continued gains.
Moreover, the 200 SMA is gaining upward traction below the shorter moving averages, reinforcing the pair's potential for an upward trend. Analysts predict that the EUR/USD will continue to extend its intraday gains above 1.0450, with prospects of achieving higher highs if current conditions persist.
The EUR/USD pair has responded positively to improved market sentiment, with the US Dollar showing signs of weakness. This shift is partially due to data from the Euro area indicating a 0.6% monthly increase in core HICP inflation in February. Such economic indicators have bolstered confidence in the Euro, contributing to its recent gains against the US Dollar.
As traders look ahead, several factors are expected to influence the EUR/USD pair's trajectory. Upcoming US data releases and geopolitical developments will likely play significant roles in shaping market dynamics. Additionally, anticipated US tariffs on imports from China, Mexico, and Canada could impact currency movements and investor sentiment.
Currently, the EUR/USD trades above 1.0425, bolstered by the dynamic support provided by the 20 SMA. Furthermore, it maintains a position above the 1.0380 support level, indicating resilience despite recent volatility. These technical levels are critical in providing a foundation for potential upward momentum.