- EUR/USD celebrates the renewed optimism about the war between Russia and Ukraine.
- Risk appetite weighs negatively on the safe-haven US dollar.
- EUR bulls need to reclaim the 100 SMA on the 4-hour chart for further rally.
EUR/USD returns to weekly highs of 1.1053 as the US dollar comes under renewed selling pressure amid a new wave of risk appetite.
Market sentiment received a further boost after UK military intelligence sources said the Russian invasion of Ukraine has largely stalled on all fronts.
The US dollar also remains under pressure from falling Treasury yields, despite the Fed’s aggressive turn, which suggested six more rate hikes this year. The Fed result indicated that the world’s most powerful central bank remains on track to curb inflation even as the world grapples with uncertainty due to the war between Russia and Ukraine.
Geopolitical developments will continue to affect market risk perception ahead of Thursday’s second-tier US economic releases.
EUR/USD technical outlook
As seen on the 4-hour chart, the EUR/USD is challenging the downsloping 100-period simple moving average at 1.1052.
A sustained break above this region is needed to extend the recovery momentum towards the round 1.1100 level.
The RSI is slightly above the midline, justifying the renewed rally in price.
If the bulls manage to extend their hold, then the pair could retest the 10th Mar high at 1.1121.
EUR/USD 4 hour chart
On the other hand, strong support is seen around 1.0970, where the 21 and 50 SMAs meet.
The bears could accelerate the pullback towards the previous day’s low at 1.0949 if the aforementioned support gives way.
Further down, the last line of defense for the bulls is seen at the round level of 1.0900.
EUR/USD additional levels
Source: Fx Street
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