The EUR/USD currency pair is set to extend its recent advance. Today, it’s been trading near new weekly highs above 1.1600. According to the analyses from this pair, they recently landed just above this crucial threshold. It is starting to get some bullish traction as the demand for the US Dollar (USD) weakens. The upcoming remarks from Federal Reserve speakers on Wednesday could further influence market dynamics and sentiment surrounding the euro and dollar exchange rate.
As things stand, EUR/USD is trading a few dozen pips above 1.1600, with the bullish technical bias prevailing over the short-term having been largely strengthened. Traders are becoming more bullish on the euro. This move marks a significant reversal just as the USD has begun to falter. The pair’s action the last couple of weeks indicates that support indeed has been found at 1.1600. This is the level to watch to maintain bullish momentum longer term.
Those recent gains haven’t sent EUR/USD above the flat 20 Simple Moving Average (SMA). This SMA has been serving as a dynamic resistance level in the vicinity of 1.1630. This critical technical indicator will be critical in figuring out the eventual short-term direction of the currency pair. Otherwise, if EUR/USD can clear the resistance area, the door may open for additional upside potential. If consumers finally make their way in, traders will next target ranges at 1.1670 and 1.1710.
100 SMA for EUR/USD is strongly bullish and its located far below the trading level. All of this points to the idea that although there are plenty of short-term wiggles, euro bulls can still go with the long-term trend. This long-term moving average is leaning a little bearish. If the pair is unable to hold onto its recent strength, we may be in for some bearish danger.
In any case, that recent bullish momentum is something to behold! The Relative Strength Index (RSI) for EUR/USD is currently breaking to the upside and currently hovers at about 62. That means there’s room for further upside before reaching overbought territory. This solidifies a bullish sentiment for traders who are long the EUR.
Support euro support levels are found at 1.1600, 1.1560 and 1.1520. If the pair comes under bearish pressure, traders will need to watch these levels closely. They may be leading indicators for capitalizing on future price bottoms. Should this positive movement persist, it can push above the resistance around 1.1630. If so, keep an eye on the following resistance areas at 1.1670 and 1.1710.
As market participants await insights from Federal Reserve speakers this Wednesday, their commentary could play a pivotal role in shaping expectations regarding monetary policy and interest rates. Hawkish or dovish turns can have an outsized impact on the market’s appetite for the USD. This, in turn, causes the EUR/USD to be overvalued.