- EUR/USD has regained its traction following Monday's drop.
- Euro could extend its rebound if it manages to clear 1.0900/1.0910 area.
- The US Dollar could have a hard time holding its ground in case risk mood improves.
EUR/USD has gathered recovery momentum and advanced to the 1.0900 area early Tuesday after having registered daily losses on Monday. The positive shift seen in risk sentiment could help the pair continue to stretch higher and buyers could show interest once 1.0900/1.0910 resistance area turns into support.
The negative opening in Wall Street's main indexes and rising US Treasury bond yields helped the US Dollar (USD) outperform its rivals on Monday. The market positioning suggests that investors are leaning toward another 25 basis points Federal Reserve rate hike in May with the CME Group's FedWatch Tool pointing to a nearly 70% probability.
Following the four-day Easter holiday, the Euro Stoxx 50 opened 0.5% higher, reflecting an improving market mood. Meanwhile, US stock index futures post small gains in the European trading hours. In case there is a risk rally in US stocks in the American session, the USD is likely to stay on the back foot. It's also worth noting that the Sentix Investor Confidence edged higher to -8.7 in April from -11.1 in March, supporting the Euro.
Ahead of Wednesday's highly-anticipated Consumer Price Index (CPI) data for March, however, market participants could refrain from making large bets. In that scenario, the USD's losses could remain limited even if risk flows continue to drive the action.
In the second half of the day, Minneapolis Fed President Neel Kashkari, Philadelphia Fed President Patrick Harker and Chicago Fed President Austan Goolsbee will be delivering speeches. In case these policymakers voice their willingness to vote in favor of another rate increase, the USD is likely to regather its strength and weigh on EUR/USD.
EUR/USD Technical Analysis
EUR/USD trades at around 1.0900, where the 20-period and the 50-period Simple Moving Averages (SMA) align. Slightly above that level, at 1.0910, the lower limit of the ascending regression channel acts as the next immediate resistance. Once the pair climbs above 1.0900/1.0910 area and starts using it as support, it could edge higher to 1.0930 (static level) and 1.0960 (static level, mid-point of the ascending channel).
On the downside, 1.0860/1.0850 (Fibonacci 23.6% retracement of the latest uptrend, 100-period SMA) form key support before 1.0800 (psychological level, Fibonacci 38.2% retracement).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Gold hovers around all-time highs near $3,250
Gold is holding steady near the $3,250 mark, fuelled by robust safe-haven demand, trade war concerns, and a softer-than-expected US inflation gauge. The US Dollar keeps trading with heavy losses around three-year lows.
EUR/USD retreats towards 1.1300 as Wall Street shrugs off trade war headlines
The EUR/USD pair retreated further from its recent multi-month peak at 1.1473 and trades around the 1.1300 mark. Wall Street manages to advance ahead of the weekly close, despite escalating tensions between Washington and Beijing and mounting fears of a US recession. Profit-taking ahead of the close also weighs on the pair.
GBP/USD trims gains, recedes to the 1.3050 zone
GBP/USD now gives away part of the earlier advance to fresh highs near 1.3150. Meanwhile, the US Dollar remains offered amid escalating China-US trade tensions, recession fears in the US, and softer-than-expected US Producer Price data.
Bitcoin, Ethereum, Dogecoin and Cardano stabilze – Why crypto is in limbo
Bitcoin, Ethereum, Dogecoin and Cardano stabilize on Friday as crypto market capitalization steadies around $2.69 trillion. Crypto traders are recovering from the swing in token prices and the Monday bloodbath.
Is a recession looming?
Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.