- The euro starts the week with rises in the market.
- The DXY without major changes, remains in the area of highs in years.
- EUR/USD with resistance ahead at 1.0440/50 and 1.0480.
EUR/USD is rising for the second day in a row on Monday, rebounding from a multi-year low. It recently posted a new daily high at 1.0435, the highest level since Thursday. The euro shows strength at the beginning of the week.
The dollar remains firm, but without highs
The EUR/USD’s moderate rise is trailed by a stronger euro. The dollar remains firm, but without setting new highs in the market. The Dollar Index is trading at 104.45, virtually unchanged from Friday’s close. Treasury bond yields are flat on Monday.
The better mood in the markets contributes to the good performance of the euro, to which is added a rise in the yields of German bonds, with the 10-year rate approaching 1%. EUR/CHF is near 1.0800 at highs since Wednesday and EUR/GBP has erased losses, recovering from 12-day lows.
The European Commission published its forecasts and sees the region expanding at a rate of 2.7% this year and 2.3% in 2023 (revised down from 4.3% and 2.4%). They estimate that inflation will end the year at 6.1% and 27% next year.
In the US, the Empire Manufacturing Index will be published on Monday and John Williams, president of the New York Fed, will speak. Beyond the data, it is expected that the focus will remain on what is happening with the equity markets and the tensions.
Very short-term recovery, firm negative trend
Despite the recovery above 1.0400, Negative Dominant Trend Remains Firm in EUR/USD. In the very short term, there are positive signs for the euro, especially if it remains above 1.0400/10, a horizontal support zone and where the moving average of 20 passes in four hours. On the upside next resistance is seen at 1.0440/50 and then at 1.0480.
If the euro loses momentum and falls below 1.0390, bearish pressures could be present again. Below the support at 1.0370 is Friday’s low at the 1.0350 area.
Technical levels
Source: Fx Street
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