|

EUR/USD stands tall near its highest level since August, around mid-1.0900s

  • EUR/USD remains well supported by the underlying bearish sentiment surrounding the USD.
  • Expectations that the Fed is done raising rates and a positive risk tone undermine the buck.
  • The recent hawkish remarks by ECB officials lend some support ahead of the FOMC minutes.

The EUR/USD pair enters a bullish consolidation phase during the Asian session on Tuesday and oscillates in a narrow trading band just below mid-1.0900s, or its highest level since August 14 touched the previous day.

The US Dollar (USD) remains depressed near its lowest in more than two months in the wake of growing acceptance that the Federal Reserve (Fed) is done with its policy-tightening campaign. In fact, the markets have priced out the possibility of any additional rate hikes and expect that the US central bank may start to cut rates soon. Meanwhile, expectations for the Fed's future policy action dragged the yield on the benchmark 10-year US government bond to a two-month low. Apart from this, the risk-on environment is seen undermining the safe-haven Greenback and acting as a tailwind for the EUR/USD pair.

That said, Fed officials have still not ruled out the possibility that more rate hikes could be needed should a change in economic data require it. In fact, Richmond Fed President Thomas Barkin said on Monday that inflation is likely to remain stubborn and force the central bank to keep interest rates higher for longer than investors currently anticipate. This, in turn, raises the uncertainty over the timing of when the Fed will begin cutting rates. Hence, Tuesday's release of the FOMC meeting minutes, due later during the US session, will be scrutinized closely for cues about the Fed's future policy action.

The outlook, in turn, will determine the next leg of a directional move for the buck and the EUR/USD pair. Heading into the key event risk, the recent hawkish remarks by the European Central Bank (ECB) officials, pushing back against expectations for early rate cut bets, should lend support to the major. Bundesbank President Joachim Nagel said on Friday that it would be unwise to start cutting interest rates too soon. Moreover, ECB policymaker Robert Holzmann argued that the second quarter was simply too soon for a rate cut. This, in turn, suggests that the path of least resistance for spot prices is to the upside.

There isn't any relevant market-moving macro data due for release from the Eurozone on Tuesday, leaving the EUR/USD pair at the mercy of the USD price dynamics. The US economic docket, meanwhile, features Existing Home Sales data, though might do little to provide any impetus ahead of ECB President Christine Lagarde's appearance at an event in Berlin and the crucial FOMC meeting minutes. Nevertheless, the aforementioned fundamental backdrop favours bullish traders, suggesting that any meaningful corrective decline might be seen as a buying opportunity and is more likely to remain limited.

Technical levels to watch

EUR/USD

Overview
Today last price1.0947
Today Daily Change0.0005
Today Daily Change %0.05
Today daily open1.0942
 
Trends
Daily SMA201.07
Daily SMA501.0637
Daily SMA1001.0792
Daily SMA2001.0806
 
Levels
Previous Daily High1.0952
Previous Daily Low1.0898
Previous Weekly High1.0909
Previous Weekly Low1.0665
Previous Monthly High1.0695
Previous Monthly Low1.0448
Daily Fibonacci 38.2%1.0931
Daily Fibonacci 61.8%1.0918
Daily Pivot Point S11.0909
Daily Pivot Point S21.0876
Daily Pivot Point S31.0855
Daily Pivot Point R11.0963
Daily Pivot Point R21.0985
Daily Pivot Point R31.1018

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.
 

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.

How AI, blockchain, stablecoins are shaping a new global economy – Circle CEO Jeremy Allaire

Artificial Intelligence (AI), blockchain technology and stablecoins are emerging as core pillars of a new global economic system, according to Circle’s CEO, Jeremy Allaire.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Bitcoin steadies as traders eye US–Iran talks

Bitcoin (BTC) price is stabilizing around $68,000 at the time of writing on Thursday after a 6.2% relief rally the previous day amid a broader downward trend.