EUR/USD bulls lurk at key hourly support in the open

EUR/USD has opened with a slight offer to test below the 1.04 figure. The US dollar is also a tough soft so the gap in the euro is vulnerable to the upside towards reclaiming positive territory. The markets were risk-on at the end of the week so there is the possibility of a continuation to the upside. Moe on the technicals below. 

Meanwhile, the Dow Jones Industrial Average rose by 1.5% to 32,196.66, the S&P 500 rose 2.4% to 4,023.89 and the Nasdaq Composite was 3.8% higher at 11,805.00. Friday's gains, however, were not enough to pull the indexes from a weekly slump, as all three declined, with the Nasdaq 2.8% lower. The S&P 500 saw a weekly loss of 2.4% while the Dow slipped 2.1%.

This leaves the risk sentiment mixed for Asian equities and risk-related currencies for the day ahead. However, the euro can befit from sharply higher yields in the EU with the German yields moving up 11bps and Italian yield by some 134bps.  

Elsewhere, the focus will be US Fed speakers. "Fed officials will continue to provide remarks in the upcoming week on the heels of a strong CPI report, which seems to have cemented the urgency to move quickly to a more neutral policy stance", analysts at TD Securities said.

"Chair Powell's participation at a WSJ Q&A and NY Fed's Williams remarks are likely to grab the spotlight. Any chatter about the possibility of MBS sales would also garner attention."

EUR/USD technical analysis

The bears are in town but a move from the bulls could be on the cards according to the price action and the W-formation. The price has completed the formation and is holding at support. If the bulls commit, then resistance between the figure and 1.0420 could come under pressure to open the way to 1.0450.