EUR/USD analysis: holding on to gains, short-term bullish

Valeria Bednarik FXStreet

EUR/USD Current price: 1.2333

A light macroeconomic calendar leaves equities and yields as main market drivers.
Financial markets are still jumpy and sensitive, no trend should be taken for granted.

The EUR/USD pair retreats from a daily high of 1.2355 ahead of Wall Street's opening but holds on to daily gains, some 100 pips ahead of Monday's US opening. Market players are still jumpy over equities and yields moving back and forth, while the absence of first-tier data adds to the ongoing uncertainty. The dollar edged lower during Asian trading hours and early European session, on easing US Treasury yields, although they now stabilized, giving the greenback a limited impulse. US indexes are set to open lower but of their early pre-opening lows. The only macroeconomic release from this Tuesday was dollar's positive, as the NFIB Business Optimism Index surged to 106.9 in January, surpassing expectations of 106.2.

The pair's 4 hours chart shows that the positive tone persists in the short-term as the price is above its 20 and 200 SMAs, although the early rally stalled a couple of pips below the 100 SMA, now the immediate resistance around 1.2360. The Momentum indicator in the mentioned chart keeps grinding higher well into positive territory, but the RSI lost upward strength, now hovering around 57. As long as the price remains above 1.2300, the downward risk will remain limited, but the bullish potential will be clearer only with a recovery above 1.2400, unlikely for today.

Support levels: 1.2300 1.2260 1.2225

Resistance levels: 1.2650 1.2400 1.2440

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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