EUR/USD has regained its traction and rose to the 1.0850 area after having retreated toward 1.0800 earlier in the session. The US Dollar struggles to stage a decisive rebound despite upbeat consumer confidence data from the US, allowing the pair to continue to push higher.

The EUR/USD pair is up for a second consecutive day, enough to trim Friday's losses. It kept recovering after bottoming at 1.0750 on Monday, as buyers defend the downside at around 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly decline. In the daily chart, the pair develops above bullish moving averages, with the 20 Simple Moving Average (SMA) extending its bullish slope above an also bullish 100 SMA. At the same time, technical indicators head north within positive levels, flirting with two-month highs.

In the near term, and according to the 4-hour chart, the chances of an upward extension have increased. The pair has recovered above a mildly bearish 20 SMA, finding buyers on a pullback to it. At the same time, the 100 SMA crossed above the 200 SMA, both in the 1.0660/90 region, with the shorter gaining ground above the longer one. Finally, technical indicators head firmly higher, the Momentum within neutral levels, but the Relative Strength Index (RSI) indicator already at 62, reflecting substantial buying interest and in line with further gains ahead.

Caution on Wednesday’s daily cloud twist which could be magnetic and obstruct the latest advance, though if the price manages to stay above cloud, this would support the action, as the cloud thickens after the twist and will additionally underpin.

Hawkish continuation of trend after a pullback

Mar 28 2023