EUR/USD Price Analysis: Finds support around 1.0670 as chances of steady policy by Fed soar
- EUR/USD has sensed a cushion around 1.0670 amid an improvement in investors’ risk appetite.
- The Fed is expected to remain steady or hike interest rates by 25 bps on order to maintain pressure on inflation.
- EUR/USD is auctioning in a Bullish Pennant chart pattern that indicates an upside momentum.
The EUR/USD pair has found a cushion around 1.0670 in the early Tokyo session. The major currency pair is expected to recapture the round-level resistance of 1.0700 as investors are quite confident about a less-hawkish interest rate decision by the Federal Reserve (Fed), scheduled for Wednesday. Considering the declining trend in the United States inflation and banking debacle, the Fed is expected to remain steady or hike interest rates by 25 basis points (bps) on order to maintain pressure on inflation.
The US Dollar Index (DXY) is defending the 103.60 cushion, however, the downside seems favored as investors’ risk appetite is improving. S&P500 futures are showing strong recovery in early Asia after a battered Friday as the headline of UBS taking over Credit Suisse is infusing confidence among the market participants.
Sky News reported that under the takeover UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse. And, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.
EUR/USD is auctioning in a Bullish Pennant chart pattern, which indicates that the asset is in upside momentum. Usually, the aforementioned chart pattern delivers a bearish reversal after reaching a point where the upside momentum gets exhausted.
A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 1.0630, indicates more upside ahead.
The Relative Strength Index (RSI) (14) is working hard for a confident shift into the bullish range of 60.00-80.00, which would strengthen the Euro.
For an upside move, a decisive break above the round-level resistance of 1.0700 will drive the asset toward the horizontal resistance plotted from March 15 high at 1.0760 and February 14 high at 1.0804.
On the flip side, a downside break below March 17 low at 1.0612 would drag the shared currency pair toward March 16 low at 1.0551, followed by March 15 low at 1.0516.
EUR/USD hourly chart
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
