EUR/USD plummeted to fresh 2-month lows on the back of the acute rebound in the greenback after investors shifted their expectations to a larger rate hike by the Fed at the March gathering
In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB after the bank has already anticipated another 50 bps rate raise at the March event.
Back to the euro area, recession concerns now appear to have dwindled, which at the same time remain an important driver sustaining the ongoing recovery in the single currency as well as the hawkish narrative from the ECB.
So far, the pair is retreating 0.11% at 1.0538 and faces the next support at 1.0524 (monthly low March 8) seconded by 1.0481 (2023 low January 6) and finally 1.0325 (200-day SMA). On the other hand, the breakout of 1.0713 (55-day SMA) would target 1.0804 (weekly high February 14) en route to 1.1032 (2023 high February 2).
