The US dollar continued its pullback on Tuesday’s morning session as the greenback continues to leak the recent crisis-driven safe-haven demand and remains underpinned by the Euro, which has enjoyed a few good trading sessions. The improvement in outlook towards banking shares has seen the US regional banks’ shares rebound as the sentiment that the US regulators can contain a banking crisis if it arises pushed investors away from the greenback towards riskier assets.
The Euro is also currently enjoying an excellent start to the week as investors price in the hawkish remarks by several European Central Bank (ECB) members. The prevailing sentiment is that the ECB will continue to hike interest rates, and the upcoming speeches by the members of the ECB could give a further boost to the EURUSD if members give assurance of the bank’s commitment to target inflation amid increased fears of a banking industry crisis.
Technical
The 4H chart shows that the EURUSD currency pair, also known as “The Fiber”, is currently looking to push higher following a correction of the pair’s main trend upward. The price action is currently above the 50-day moving average and has firmly established a major resistance and a major support level at 1.10329 and 1.05252, respectively.
For the bullish sentiment, as the price action continues to trend higher, the bulls could be looking to the resistance level at the 23.60% Fibonacci level of 1.08316 as a potential short-term trading opportunity. The breakthrough above the 23.60% Fibonacci level could send bullish signals, and the increased buying momentum could push the price towards the 23rd of March 2023 last swing high of 1.09304.
The market could interpret the fall below the pivot level at 1.077 as a presence of buyers and could bring the 50-day moving average and the 1.07310 into play. A sustained move below the pivot level could trigger a move below the 1.07310 support level, a level of interest for the bears, with the golden ratio at the 1.06728 price level firmly in the bears’ sight.
Summary
The remarks by the ECB member could be firmly driving the investor sentiment towards the currency pair for the morning trading session and the trading opportunity could exist at the price level of 1.08316. Still, investors could warry for increased friction as the price tries to push towards the last swing high.
Sources: TradingView, Reuters.
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