The EUR/USD bottomed at 1.1067 after the beginning of the American session and then rebounded to the 1.1135 area as stocks trimmed losses in Wall Street. The greenback lost momentum as US yields remain near daily lows.

That said, immediately to the upside comes the temporary resistance at the 55-day SMA, today at 1.1198 ahead of the 1.1250 region, where the 100-day SMA and the 8-month line coincide. Beyond this area, the selling bias is expected to subside and allow for extra gains in the short-term horizon.

The medium-term negative outlook for EUR/USD is expected to remain unchanged while below the key 200-day SMA, today at 1.1488.

The correction of EUR/USD from the highest level in four weeks near 1.1200 alleviated the bullish pressure, but so far, it did not change the current positive outlook for the euro. The pair rebounded and managed to remain above the 20-Simple Moving Average in the four-hour chart (currently at 1.1080) and recovered the 1.1100 mark.

A firm break under 1.1080 would change the current bias to neutral. The immediate, relevant support might be seen at 1.1035/40.  On the upside, the 1.1135 zone has become a critical resistance again. If the euro rises above the latter, a test of the weekly high at 1.1185 should not be ruled out.

The eurozone economy will continue to be much more negatively affected by the Ukraine war than the US economy. So we are still positive on the US dollar versus the euro, but we see less upside than the parity we indicated a few weeks ago.

EURUSD to be Negatively Affected by Ukraine War

Mar 31 2022