The resumption of the risk-off mood among investors lends fresh oxygen to the dollar and forced EUR/USD to retreat to the 1.1320 region, or 2-day lows, on Thursday.

EUR/USD now seems to have met decent resistance around the 1.1400 zone amidst some loss of momentum in the relief rally in combination with the resumption of the geopolitical-led risk aversion. Looking at the broader scenario, the improvement in the pair’s outlook appears underpinned by fresh speculation of a potential interest rate hike by the ECB at some point by year end, higher German yields, persevering elevated inflation and a decent pace of the economic activity and other key fundamentals in the region

The first hurdle is located at 1.1400 (psychological level, Fibonacci 23.6% retracement of the latest uptrend) ahead of 1.1450 (static level) and 1.1480 (static level).”

“On the downside, key support seems to have formed at the 1.1340/1.1350 area (Fibonacci 38.2% retracement, 200-period SMA) before 1.1320 (100-period SMA) and 1.1300 (psychological level, Fibonacci 50% retracement).

So far, spot is retreating 0.12% at 1.1358 and faces the next up barrier at 1.1395 (weekly high Feb.16) followed by 1.1491 (200-week SMA) and finally 1.1494 (2022 high Feb.10). On the other hand, a drop below 1.1323 (low Feb.17) would target 1.1279 (weekly low Feb.14) en route to 1.1186 (monthly low Nov.24 2021).

EURUSD FAILURE OF BREAKING DAILY RESISTANCE WILL EMPOWER BEARS

Feb 17 2022