The EURUSD opened with mixed sentiments from investors as they try to price in the weekend’s events amid fears of a potential banking crisis. The announcement of UBS’s $3.23 billion takeover of Credit Suisse during the weekend helped the European bank shares claw back some of the recent losses, and the Euro suffered.
The announcement by the US Fed that they will be offering additional liquidity in the form of daily swaps to the Swiss National Bank (SNB), European Central Bank (ECB), Bank of Canada (BoC) and the Bank of Japan (BoJ) also helped improve market sentiments, and the US dollar’s rally was limited as the crisis-driven demand was subdued.
The 4H chart shows that the price action is currently on an upward trajectory after the last week’s sharp decline, and the bulls have firmly set their sight towards the 13th March 2023 low of 1.07209. If the price action breaks through the initial level of significance, supported by volume, the bulls could look to the 1.07599 resistance level as a level of interest.
The bears could find a short-term trading opportunity around the 61.80% Fibonacci level at the support level of 1.05997, a level of significance for the bears. If a breakthrough below the initial support level is supported by increased volume, the bears could look to push the price action lower towards the 1.05509 support level.
The investors will likely be assessing decisions taken by major central banks and the upcoming interest rates decisions by the US Fed and the Bank of England (BoE) and could target the 1.07209 resistance level as a level of significance.
Sources: TradingView, Reuters.