Bullish Bat Pattern Continue to Play!
The EUR/USD closed at 1.2033 after placing a high of 1.2049 and a low of 1.1942. EUR/USD pair rose on Monday and reached its highest since 4th March amid U.S. dollar weakness. The demand for Euro continued to rise due to weakness in its rival currencies, including the British Pound and the U.S. dollar. On Monday, the U.S. Dollar Index dropped sharply near its 7-week lowest level at 91.03 level and weighed heavily on the U.S. dollar that helped its rival currencies, including Euro, as both share a negative correlation. It means the weakness in the U.S. dollar has driven the recent strength in Euro.
The greenback was suffering as the market unravel speculation that the Federal Reserve could tighten U.S. monetary policy anytime soon. This was added by the unsurprising U.S. inflation data that faded any hope for a surge in inflation. Investors are starting to sell the U.S. dollar in favour of other riskier currencies for getting higher yields. So, the evaporated speculations of more hawkish Federal Reserve continued weighing on the U.S. dollar and benefitting EUR/USD pair.
On the data front, there was no macroeconomic data to be released from the U.S. side, from the European side, 13;00 GMT, the Current Account Balance from the Eurozone dropped to 25.9B against the expected 31.2B and weighed on single currency Euro that capped further gains in EUR/USD pair.
However, the EUR/USD pair gains were limited throughout the day amid the rising U.S. treasury bond yields. The benchmark 10-year Treasury yield rose above 1.6% on Monday in the second half of the day and supported the U.S. dollar prices a little that eventually capped further gains in EUR/USD pair.
Meanwhile, on Sunday, the European Commissioner for Interior Market, Thierry Breton, said that Europe could decide not to renew its contract with the AstraZeneca pharmaceutical group due to delays in the delivery of vaccines since the start of the year.
On Tuesday, Germany will unveil the March Producer Price Index, and on Thursday, the European Central Bank is expected to hold its April policy decision. If the bank takes a more optimistic tone on the Eurozone economy, it could lead to stronger support for Euro and vice versa. On Thursday, French and Eurozone confidence data will also be revealed along with the U.S. jobless claims data.
EURUSD Intraday Technical Levels
Pivot Point; 1.2008
EUR/USD - Technical Outlook
The technical side of the EUR/USD is exhibiting a solid bullish bias amid a weaker dollar and stronger Euro. Most of the market movement in the EUR/USD continues to depend upon the technical outlook as both nations lack high-impact economic events. The single currency Euro is trading at 1.2060 level, having disrupted an immediate resistance level of 1.2040. Above this, the next resistance holds around 1.2112 level, and violation of this level can also extend EUR/USD pair towards the next double top resistance level of 1.2246. The bullish bat pattern on the daily timeframe is playing well for the EUR/USD pair as it has already achieved its expected targets at 1.1983 and 1.2112. The recent bullish crossovers on MACD and RSI are supporting a bullish trend in the pair. Overall, bullish bias dominates in EUR/USD pair, especially over the 1.2008 level today. All the best!
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