EUR/USD: Recovery remains capped below 1.1800
Technical Overview
The EUR/USD pair is consolidating below the 200 DMA, for the second day in a row. The euro hit a new low at 1.1759. The area around 1.1750/60 is a strong support that could help the euro alleviate the bearish pressure. Still, no signs of a correction are seen. According to the 4-hour chart, the risk is skewed to the downside. Still, with RSI and Momentum and extreme oversold levels attempting to flatten, some consolidation seems likely ahead of the Asian session. A break under 1.1750 would leave the euro more vulnerable.
Support levels: 1.1750 1.1710 1.1685
Resistance levels: 1.1800 1.1835 1.1885
Fundamental Overview
Despite concerns about a further escalation of diplomatic tensions between China and Western countries, the Asian equity markets kicked off on a position note. This, in turn, prompted some profit-taking around the safe-haven US dollar, which was seen as one of the key factors that extended support to the EUR/USD pair.
On the other hand, concerns about the economic fallout from the third wave of COVID-19 infections in Europe could keep a lid on any meaningful upside for the shared currency. Investors seem worried that pandemic-related restrictions could derail the fragile Eurozone economic recovery amid the slow pace of vaccinations.
The combination of factors might contribute towards capping gains for the EUR/USD pair. Traders now look forward to the release of the German Ifo survey, which is expected to show an improvement in business morale. Given that the sentiment around the euro remains weak, the market reaction to a stronger reading is likely to be limited.
Meanwhile, the US economic docket features the release of Personal Income/Spending figures for February, Core PCE Price Index and revised Michigan Consumer Sentiment index. The data, along with the US bond yields and the broader market risk sentiment, might influence the USD and also produce some trading opportunities around the EUR/USD pair.
The EUR/USD pair is consolidating below the 200 DMA, for the second day in a row. The euro hit a new low at 1.1759. The area around 1.1750/60 is a strong support that could help the euro alleviate the bearish pressure. Still, no signs of a correction are seen. According to the 4-hour chart, the risk is skewed to the downside. Still, with RSI and Momentum and extreme oversold levels attempting to flatten, some consolidation seems likely ahead of the Asian session. A break under 1.1750 would leave the euro more vulnerable.
Support levels: 1.1750 1.1710 1.1685
Resistance levels: 1.1800 1.1835 1.1885
Fundamental Overview
Despite concerns about a further escalation of diplomatic tensions between China and Western countries, the Asian equity markets kicked off on a position note. This, in turn, prompted some profit-taking around the safe-haven US dollar, which was seen as one of the key factors that extended support to the EUR/USD pair.
On the other hand, concerns about the economic fallout from the third wave of COVID-19 infections in Europe could keep a lid on any meaningful upside for the shared currency. Investors seem worried that pandemic-related restrictions could derail the fragile Eurozone economic recovery amid the slow pace of vaccinations.
The combination of factors might contribute towards capping gains for the EUR/USD pair. Traders now look forward to the release of the German Ifo survey, which is expected to show an improvement in business morale. Given that the sentiment around the euro remains weak, the market reaction to a stronger reading is likely to be limited.
Meanwhile, the US economic docket features the release of Personal Income/Spending figures for February, Core PCE Price Index and revised Michigan Consumer Sentiment index. The data, along with the US bond yields and the broader market risk sentiment, might influence the USD and also produce some trading opportunities around the EUR/USD pair.
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