EUR/USD analysis: More gains above 1.0740
|EUR/USD Current price: 1.0730
Geopolitical tensions took a pause on Tuesday as global markets re-opened following Easter Holidays, but they are still there. The US dollar index fell sharply, tumbling below the 100.00 handle. The signals of a potential bullish rally, following US Treasury Secretary Mnuchin comment’s yesterday (USD strength is a good thing), disappeared on Tuesday, on European hours after Theresa May surprised markets with a call for elections.
UK PM announcement of general elections pushed the greenback further to the downside, except versus the Aussie and the Canadian dollar, that were the worst performers. The recovery in Treasuries also played a role against the US dollar. Gold bounced sharply from $1280 back to $12090.
The EUR/USD pair rose sharply despite the dramatic decline in EUR/GBP. The euro first rose back above 1.0670 and then jumped on top of 1.0700 for the first time since late March. The rally also pushed the price back above the 20-day moving average. A consolidation on top of 1.0700, could lead to a test of 1.0800 over the next days. For the next hours, after the 85-pip rally, a consolidation sounds likely but the bullish momentum is still strong. In the 4-hours chart, the RSI shows an extreme reading but still not signals of a turn, suggesting that the rally could continue during the Asian session. For that to take place the pair needs to break the strong 1.0740 barrier. On top of that level, the next resistances are seen at 1.0780 and 1.0805. A failure to break above 1.0730/40 could lead to a correction to 1.0700. Only below 1.0675, the actual bullish bias would lose strength.
Support levels: 1.0610 1.0570 1.0530
Resistance levels: 1.0705 1.0740 1.0780
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