EURUSD pair has continued to rise early Tuesday. 1.0820 is a key technical level, and buyers may remain interested if it is confirmed as support. Further the risk-on market environment on Monday made it difficult for the US Dollar to maintain its footing, allowing EURUSD to rise.
The ECB’s commentary and risk flows help the EURUSD rise.
European Central Bank (ECB) officials reaffirmed their commitment to fighting inflation. Policymaker Mario Centeno stated that the size of the next rate hike will be determined by data. And Isabel Schnabel stated that they had no real concerns about financial stability risks adding that the labor market showed no signs of weakness.
Moreover Later in the meeting, ECB President Christine Lagarde will speak at the Bank for International Settlements Innovation Hub. At euro system Centre’s opening ceremony.
The Conference Board’s Consumer Confidence Index for March will be featured on the US economic calendar. The one-year consumer inflation rate expectation component of the survey fell to 6.3% in February, down from 6.7% in January. A similar decline could feed into expectations that the Fed will maintain its policy rate at the next policy meeting. Putting additional pressure on the US Dollar and vice versa. Meanwhile, in the European session, US stock index futures trade mixed.
However if risk flows dominate the markets in the afternoon. The EURUSD should hold its ground. On a negative shift in risk perception, on the other hand, is likely to limit the pair’s upside.
EURUSD Technical Outlook
The four-hour chart’s Relative Strength Index (RSI) indicator remains near 60. Indicating that EURUSD has more room to rise before becoming technically overbought.
Furthermore pair was trading just a few pips away from 1.0820. The Fibonacci 23.6% retracement of the most recent uptrend. Once that level is confirmed as support, further gains towards 1.0870 (static level). And 1.0900/1.0910 (psychological level, uptrend endpoint) are possible.
On the otherhand the 20-period Simple Moving Average (SMA) at 1.0800 serves as dynamic support. Followed by 1.0760 (Fibonacci 38.2% retracement, 50-period SMA) and 1.0720 (Fibonacci 50% retracement).
