The EUR/USD pair remained range-bound above 1.0900 on Wednesday, fluctuating within a tight channel. With no significant data releases, the cautious market sentiment supported the US Dollar, making it challenging for the pair to climb higher.
From a technical perspective, the risk leans towards the upside. The daily chart indicates that the pair rebounded from an intraday low of 1.0920, slightly above the 50% Fibonacci retracement of the 1.1139/1.0734 daily decline at 1.0917.
Technical indicators show signs of improvement within positive levels, indicating buyer control. Moreover, the 20 Simple Moving Average (SMA) is crossing above longer ones, although all remain within a narrow 20-pip range.
In the short term, buyers maintain control according to the 4-hour chart. Technical indicators are positive, although the Momentum indicator remains neutral. The pair is around a flat 20 SMA, struggling to gain bullish momentum.
Longer moving averages are below the current level, supporting a potential upward move. The key resistance level is at 1.0970, the 61.8% retracement of the previous decline.
Support levels: 1.0915, 1.0865, 1.0820 Resistance levels: 1.0970, 1.1010, 1.1045
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The EUR/USD pair traded within familiar levels around 1.0940 on Wednesday, ahead of the US session opening. Market focus shifted past the latest US Consumer Price Index (CPI) report, which showed inflation remained above the Federal Reserve’s 2% target in February but eased at a slower pace than expected. However, this had little impact on FX markets and did not significantly alter expectations of Fed interest rate cuts.
Wall Street closed with solid gains on Tuesday, buoyed by a rebound in the tech sector. However, Asian markets saw momentum wane, particularly in China, where Country Garden Holdings’ missed coupon payment on a yuan bond raised concerns. Additionally, speculation that the Bank of Japan may soon end its negative-rate policy weighed on local markets.
European markets appeared more optimistic, with most indexes trading in positive territory, providing some support for the Euro against the Dollar. However, gains were limited following comments from European Central Bank (ECB) policymaker Francois Villeroy de Galhau, who suggested that interest rate cuts are more likely in June.
In terms of data, Eurozone Industrial Production for January disappointed, falling 3.2% month-on-month and 6.7% year-on-year, worse than expected. The upcoming US session has no significant data releases, with attention turning to Thursday’s Retail Sales figures.