EUR/USD Forecast: Confidence pushing it to fresh one-month highs
|EUR/USD Current Price: 1.0777
- As the banking crisis seems contained, market participants recover their optimism.
- The Euro advances despite tepid Eurozone and German tepid macroeconomic figures.
- EUR/USD nears the 1.0800 threshold with a strong near-term bullish momentum.
The EUR/USD pair maintains its positive one, advancing for a fourth consecutive day and reaching fresh March highs. The pair advanced above 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly decline, a level that has attracted sellers since early February. Euro gains are linked to an improved market mood amid measures to support the global financial system. News that JPMorgan Chase is assisting First Republic Bank helped shares of the latter bounce back, boosting indexes. Last week, ten major United States banks announced they were depositing a combined $30 billion in First Republic.
Government bond yields are also up after a temporal setback in early London. The yield on the 10-year Treasury note currently stands at 3.56%, up 8 basis points and recovering from an intraday low of 3.44%. The 2-year note offers 4.13%, up a whopping 21 bps.
Data-wise, Germany published January Construction Output, which increased by 3.9% MoM, better than anticipated. On the other hand, the German ZEW Survey showed that the Economic Sentiment in the country declined by more than expected in March, posting 13 vs the previous 28.1. Eurozone Economic Sentiment fell to 10 from 29.7 in February, while the assessment of the Current Situation collapsed to -46.5. The US will only release February Existing Home Sales.
EUR/USD short-term technical outlook
The EUR/USD pair trades in the 1.0770 price zone, with increased bullish potential. In the daily chart, EUR/USD is well above its moving averages, with the 20 Simple Moving Average (SMA) turning north above the longer ones. At the same time, the Momentum indicator remains within positive levels, although without directional strength, while the Relative Strength Index (RSI) indicator heads firmly north well into positive levels.
In the near term, and according to the 4-hour chart, the upward strength is much clearer. Indicators head firmly north near overbought readings without signs of bullish exhaustion. At the same time, the 20 SMA is about to cross above the 200 SMA, while the 100 SMA advances below it, which reflects buyers’ strength.
Support levels: 1.0745 1.0685 1.0640
Resistance levels: 1.0790 1.0825 1.0860
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