EURUSD attracts buyers for the second day in a row, pulling away from a more than one-month low.
On Thursday, the EURUSD pair builds on the overnight bounce from the highly crucial 200-day Simple Moving Average (SMA) support near 1.0845. Gaining some bullish traction for the second day running Spot prices. However, struggle to benefit on the increase beyond the 1.0900 round figure. Requiring some prudence before positioning for any more gains given the underlying positive tone encircling the US dollar.
Reduced bets on a March Fed rate drop benefit USD bulls and should help to contain gains.
The better-than-expected announcement of US retail sales numbers on Wednesday. Indicated that consumer spending remains resilient and that the economy is in good shape. This gives the Federal Reserve (Fed) more latitude to keep interest rates higher for longer. Forcing investors to reduce their expectations for a March rate cut. The hawkish view remains supportive of rising US Treasury bond rates, which benefits USD bulls and should limit any major appreciation in the EURUSD pair.
EURUSD Technical Outlook
The scenario is bearish and supports the possibility of new selling at higher levels
Meanwhile, oscillators on the daily chart have just begun to trend negative. This, combined with the recent breach of a short-term trading range, bodes well for the emergence of new sellers at higher prices.
The trading range support breakpoint, around 1.0920, now appears to operate as an immediate strong barrier. However, some follow-through purchasing might cause a short-covering rebound, allowing the EURUSD pair to make another effort to break over the key 1.1000 level.
However, the theoretically critical 200-day SMA, which is currently around 1.0845, may continue to buffer the immediate downside. A convincing break below will serve as a fresh trigger for bearish traders, exposing the 100-day SMA support near the 1.0785 level. The downward trend could continue, dragging the EURUSD pair closer to the December monthly swing low, which is around 1.0725-1.0720.
