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EUR/USD rebounds after two consecutive days of losses, boosted by risk-on impulse, weaker USD

  • Despite high US T-bond yields, EUR/USD rebounds after two consecutive days of losses.
  • A risk-on impulse underpinned the Euro to the detriment of the US Dollar.
  • EUR/USD Price Analysis: Triple bottom pattern remains in play as long as EUR/USD stays above 1.0759

EUR/USD snaps two straight days of losses and climbs after hitting a daily low of 1.0744 amidst a subdued session. Despite high US Treasury bond yields, risk-appetite improvement and a softer US Dollar (USD) opened the door for further Euro (EUR) upside. At the time of writing, the EUR/USD is trading at 1.0789 above its opening price.

US equity markets are mixed, with the Dow Jones and the S&P 500 rising while the Nasdaq tumbles. Market participants cheered First Citizens BancShare’s takeover of the Silicon Valley Bank (SVB), while US authorities are considering expanding emergency lending facilities to First Republic Bank.

Data-wise, the March US Dallas Fed Manufacturing Index plunged -15.7, more than February’s -13.5 collapse and worse than the -10.9 estimate. Delving into the data, the Production Index and the Employment component rose. New Orders declined, and the Price Index fell from 15.5 to 7.0.

US Treasury bond yields recovered, with 2s meandering around 4%, while the 10-year benchmark note rate sits at 3.515%, gaining thirteen basis points. The greenback has failed to capitalize on the US bond yields rise, with the US Dollar Index (DXY) sliding 0.19% at 102.915.

On the Eurozone (EU) front, European Central Bank (ECB) speakers are crossing the wires. Nagel acknowledged the increasing importance of taking a meeting-by-meeting approach, though he emphasized that the path of monetary policy normalization would continue. He added that QT would accelerate soon. On the flip side, ECB’s de Cos took a cautious approach due to high levels of uncertainty in the financial markets.

Of late, ECB’s board member Isabel Schnabel commented that she wanted to signal that further rate hikes were possible, according to people who know the matter.

EUR/USD Technical analysis

EUR/USD Daily chart

Technically speaking, the EUR/USD is neutral to upward biased, with a triple bottom staying in play as long as the EUR/USD remains above 1.0759. Oscillators are giving mixed signals. The Relative Strength Index (RSI) favors EUR/USD upside, while the Rate of Chance (RoC) suggests that buying pressure is waning. The path of least resistance is upwards; therefore, the EUR/USD first resistance would be 1.0800. Once broken, the EUR/USD’s next ceiling would be 1.0929, followed by the 1.1000 figure.

EUR/USD

Overview
Today last price1.0793
Today Daily Change0.0033
Today Daily Change %0.31
Today daily open1.076
 
Trends
Daily SMA201.0666
Daily SMA501.0729
Daily SMA1001.0615
Daily SMA2001.0334
 
Levels
Previous Daily High1.0839
Previous Daily Low1.0714
Previous Weekly High1.093
Previous Weekly Low1.0631
Previous Monthly High1.1033
Previous Monthly Low1.0533
Daily Fibonacci 38.2%1.0762
Daily Fibonacci 61.8%1.0791
Daily Pivot Point S11.0702
Daily Pivot Point S21.0645
Daily Pivot Point S31.0577
Daily Pivot Point R11.0828
Daily Pivot Point R21.0896
Daily Pivot Point R31.0953

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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