- EUR/USD retreats from more than a one-month high amid a modest USD rebound on Monday.
- Dovish Fed expectations cap USD and help limit losses ahead of ECB on Thursday.
- The technical setup favors bullish traders and supports prospects for some short-term gains.
The EUR/USD pair is attracting some sellers on the first day of the new week and for now, it seems to have snapped a three-day winning streak to an over one-month high, around the 1.0910 area touched on Friday. Spot prices are currently trading below the 1.0900 level amid a modest rebound in the US Dollar (USD), although any meaningful correction seems elusive.
From a technical perspective, the recent break through the 1.0800 confluence hurdle – comprising the 50-, 100- and 200-day simple moving averages (SMAs) – and a descending line favours bullish traders. Moreover, oscillators on the daily chart have been gaining positive traction and suggest that the path of least resistance for the EUR/USD pair is to the upside amid dovish Federal Reserve (Fed) expectations.
Some continued buying beyond the 1.0910-1.0915 area will reaffirm the constructive outlook and lift the EUR/USD pair towards the next relevant resistance near the 1.0960-1.0965 region. The momentum could extend beyond the March high around the 1.0880 area and allow spot prices to reclaim the psychological 1.1000 level for the first time since January, ahead of the European Central Bank (ECB) meeting on Thursday.
On the other hand, any significant decline is likely to attract new buyers near the breakout point of the downtrend line, near the 1.0870-1.0865 area. This should help limit the downside of the EUR/USD pair near the confluence support of 1.0800. The latter is followed by support near the horizontal zone of 1.0755-1.0750, which if broken could drag spot prices below the 1.0700 level, towards the June low, around the 1.0665 region.
Economic indicator
ECB Monetary Policy Decision Statement
At each meeting of the governing council, the European Central Bank The euro issues a brief statement explaining its monetary policy decision, with the aim of meeting its inflation target. The document is of great importance for the EUR, as any adjustment in the wording can move the common currency up (hawkish statement) or down (dovish statement).
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
