- EUR/USD leaves behind the initial pessimism and recovers the 1.0800 level.
- The dollar gives ground after reaching new cyclical highs.
- The focus is on the spring meetings of the IMF and the World Bank.
The common currency recovers the smile and raises the pair EUR/USD back above the 1.0800 level on Tuesday.
EUR/USD focuses attention on geopolitics
EUR/USD manages to regain some traction to the upside and flirts with the 1.0800 level once again after three consecutive daily declines, including a drop to levels last seen nearly 2 years ago near 1.0750 (April 14th).
The uptick in torque occurs in response to a pullback in the dollar after the US dollar index DXY has made new cyclical highs above the 101.00 barrier earlier in the session.
Another recovery boost in the pair comes from the German cash market, where 10-year bund yields are approaching the 0.90% level, an area last seen in July 2015.
There are no economic data releases on the eurozone economic calendar, while the IMF and World Bank’s spring meetings and economic outlook will be the focus of investors’ attention throughout the week. Regarding the data from the United States, today the publication of the housing data and the speech of the Governor of the Chicago Fed, C. Evans, stand out.
What can we expect around the EUR?
EUR/USD regains some composure and climbs back above 1.0800 after falling to fresh 2022 lows last week near the 1.0750 level following the dovish tone from the ECB. Despite the bounce, the outlook for the pair remains on the bearish side for now, always in response to dollar dynamics and geopolitical concerns. As usual, occasional pockets of strength in the common currency should appear to be bolstered by speculation that the ECB could raise rates before year-end, while higher German yields, elevated inflation, decent pace of recovery Economic growth and upbeat results from key fundamentals in the region also support a rally in the euro.
EUR/USD levels
At time of writing, the EUR/USD is up 0.22% on the day, trading at 1.0803. Next resistance is found at 1.0933 (11 Apr high), followed by 1.1000 (round level) and 1.1096 (55-day SMA). On the other hand, a break below 1.0757 (14 Apr 2020 low), would target 1.0727 (24 Apr 2020 low) on track to 1.0635 (23 Mar 2020 low).
Source: Fx Street
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