EUR/USD Price Analysis: Attempts a consolidation break as USD Index loses upside momentum
|- EUR/USD has delivered an upside break of the 20-pips range formed above 1.0900.
- The ECB has confirmed that more interest rates are in the pipeline due to persistence in core inflation.
- EUR/USD has shown a mild correction after confidently climbing above the 61.8% Fibonacci retracement at 1.0920.
The EUR/USD pair is coming out of the woods as the US Dollar Index (DXY) has faced stiff barricades around 102.60 in the London session. The major currency pair has delivered a breakout of the consolidation formed in a narrow range of 20 pips.
S&P500 futures have extended losses in the European session amid caution due to an extended weekend in the United States. Meanwhile, investors are looking for a potential trigger that will bring an action in the FX domain.
On the Eurozone front, more interest rate hikes are anticipated from the European Central Bank (ECB) despite a threat to economic prospects. ECB President Christine Lagarde has confirmed that more interest rates are in the pipeline due to persistence in core inflation.
EUR/USD has shown a mild correction after confidently climbing above the 61.8% Fibonacci retracement (plotted from April 26 high at 1.1095 to May 31 low at 1.0635) at 1.0920. The 20-period Exponential Moving Average (EMA) at 1.0910 is providing a cushion to the Euro bulls.
The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, which indicates that the bullish momentum is already active.
More gains will be added by the major currency pair on a break above May 02 low at 1.0942, which will drive the asset toward the psychological resistance at 1.1000 and May 08 high at 1.1054.
In an alternate scenario, a breakdown below 50% Fibo retracement at 1.0865 will drag the shared currency pair toward 38.2% Fibo at 1.0813 followed by June 14 low at 1.0775.
EUR/USD four-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.