Daily Price Outlook
The EUR/USD is currently trading at around 1.0745, as there has been an increase in investor risk appetite, leading to the rise of the currency pair. The European Central Bank increased interest rates by 0.50% last week, and recent hawkish remarks from ECB officials seem to be encouraging Euro investors.
On Sunday, ECB President Christine Lagarde stated that the central bank expects the Credit Suisse rescue plan brokered by the Swiss National Bank would bring calm to the financial markets, and the ECB is prepared to provide loans to eurozone banks if necessary.
In addition, on Friday, many ECB officials spoke to reassure investors about the soundness of the bloc's banks and support the ECB's hawkish monetary policy.
Peter Kazimir, an ECB policymaker, stated that rate hikes must continue, while Governing Council member Gediminas Imkus supported the hawkish stance by stating that they have not yet reached the terminal rate.
All of this news and action supported the euro. Going forward, EUR/USD traders should monitor ECB President Lagarde's speech, scheduled for Tuesday, for potential direction.
FOMC Meeting and EUR/USD in Focus
In the meantime, major central banks are expected to announce joint efforts to increase liquidity through existing US dollar liquidity swap line agreements, which is supporting a risk-on sentiment following the UBS-Credit Suisse deal.
The Federal Reserve may choose to leave interest rates unchanged or raise them by 25 basis points (bps) to control inflation, which is declining amid the ongoing financial crisis. While a 25bps rate hike may help curb inflation, it could also have negative impacts on the corporate banking sector.
The US Dollar Index (DXY) is currently holding steady at its support level of 103.80, while the US 10-Year Bond Yield has risen to around 3.425%. This is contributing to a capped EUR/USD.
The most significant event this week will be the Federal Open Market Committee's (FOMC) announcement of its monetary policy meeting on Wednesday, along with preliminary PMI results for March.
EUR/USD Intraday Technical Levels
Pivot Point: 1.0685
EUR/USD – Technical Outlook
The EUR/USD currency pair is currently seeing steady buying and selling, putting it on track to reach our predetermined target of 1.0745. The EMA50 is providing solid support, suggesting that the bullish trend will likely persist for the foreseeable future.
As the price reaches the target, keep an eye on it since a break over it will send the bullish wave on to the next important station at 1.0920.
A negative recovery to initially test the minor support regions around 1.0635 is possible if the price consolidates against the bullish wave. Note that if 1.0635 is broken, the day's predicted climb will be halted, and the price will fall to the first station at 1.0515.
Today's trading could take place anywhere within the range of 1.0600 (the level of expected support) and 1.0760 (the level of expected resistance).
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