EUR/USD is holding onto the latest gains below 1.0900 in the early European morning. The pair is capitalizing on broad US Dollar weakness amid a better mood and sluggish Treasury yields. Hawkish ECB-speak underpins the Euro ahead of EU PMis.

The immediate market reaction, however, is likely to remain limited as traders might prefer to wait on the sidelines ahead of the FOMC and the ECB monetary policy meetings next week. Nevertheless, rising bets for a less aggressive policy tightening by the Fed should keep the USD bulls on the defensive and support prospects for an extension of the recent appreciating move for the major.

From a technical perspective, momentum back above the 1.0900 mark might now confront some resistance near the overnight swing high, around the 1.0925 region. Some follow-through buying beyond the April 2022 peak, near the 1.0935 area, should allow bulls to reclaim the 1.1000 psychological mark.

On the flip side, any corrective pullback is more likely to find decent support near the 200-hour SMA, currently around the 1.0830-1.0825 region. This is closely followed by the 1.0800 round figure, which should act as a pivotal point. A convincing break below should pave the way for a slide below the 1.0765 area, towards testing the next relevant support near the 1.0700 mark. Some follow-through selling will negate the positive outlook and shift the near-term bias in favour of bearish traders.

EURUSD loosing its bullish momentum on daily scale

Jan 24 2023