EUR/USD Forecast: Euro stays below key resistance levels
|- EUR/USD fluctuates in a tight range near 1.0900 early Monday.
- Euro could stretch higher in case risk mood continues to improve.
- Key support seems to have formed in the 1.0850-1.0860 area.
EUR/USD managed to edge higher during the Asian trading hours on Monday and stabilized near 1.0900 after closing the previous week in negative territory. In the absence of fundamental drivers, the risk perception could drive the pair's action in the short term.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.09% | -0.06% | 0.00% | 0.12% | -0.10% | 0.14% | -0.03% | |
| EUR | 0.09% | 0.04% | 0.09% | 0.21% | -0.01% | 0.23% | 0.07% | |
| GBP | 0.04% | -0.05% | 0.03% | 0.16% | -0.06% | 0.25% | 0.01% | |
| CAD | 0.00% | -0.10% | -0.05% | 0.14% | -0.08% | 0.20% | -0.03% | |
| AUD | -0.15% | -0.23% | -0.21% | -0.15% | -0.25% | 0.00% | -0.17% | |
| JPY | 0.07% | -0.03% | 0.07% | 0.08% | 0.22% | 0.28% | 0.05% | |
| NZD | -0.20% | -0.29% | -0.25% | -0.20% | -0.05% | -0.28% | -0.23% | |
| CHF | 0.01% | -0.07% | -0.02% | 0.03% | 0.16% | -0.06% | 0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The broad-based US Dollar (USD) strength on hawkish comments from Federal Reserve officials last week forced EUR/USD to stay on the back foot. According to the CME FedWatch Tool, markets are pricing in around 55% probability of a 25 basis points Federal Reserve (Fed) rate cut in March, down from nearly 70% at the beginning of the previous week.
Meanwhile, European Central Bank (ECB) President Christine Lagarde attended a panel at the World Economic Forum on Friday and noted that inflation in the Eurozone was coming down. Lagarde refrained from further commenting on the policy outlook and failed to trigger a noticeable reaction in EUR/USD.
The US economic docket will not offer any data releases on Monday. In the early European session, US stock index futures are up between 0.1% and 0.7%. In case Wall Street's main indices stage a bullish opening and continue to push higher in the second half of the day, the USD could have a hard time finding demand.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 50 early Monday and EUR/USD closed the last 6 4-hour candles above the 20-period Simple Moving Average (SMA). Although these technical developments point to a slightly bullish tilt in the short-term, buyers could hesitate to bet on a steady recovery. The pair could face strong resistance levels at 1.0925 (200-period SMA), 1.0950-1.0960 (100-period SMA, Fibonacci 23.6% retracement of the latest uptrend) and 1.1000 (psychological level).
On the downside, strong support area seems to have formed at 1.0860-1.0850 (Fibonacci 38.2% retracement, static level) before 1.0800 (psychological level, static level) and 1.0780 (Fibonacci 50% retracement).
(This article was corrected at 08:54 GMT to say the 55% CME FedWatch Tool probability in March is for a rate cut, not a rate hike).
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