- The softer US Dollar is boosting the four-day rally, with eyes on the 50-DMA.
- Receding aggressive Fed tightening bets keep EUR/USD elevated.
- US CPI to provide the next directional bias for EUR/USD.
EUR/USD price took a sharp rebound from February’s low at 1.0537 and since then it has been aggressively heading higher. The softer US Dollar is driving the EUR/USD above the 1.0700 psychological mark, which is a multi-tested round figure mark on the daily chart.
The pair is flirting around the 50-Daily Moving Average (DMA), which is currently pegged around the 1.0727 level, at the time of writing, keeping a lid on further price momentum.
Given the fact that the upside for the pair is likely to remain intact until the US Dollar is subdued on the back of falling US Treasury bond yields, any convincing break above the 50-DMA will likely lead the pair toward the next support zone and a key psychological level at 1.0800.
On the other side, any downside for EUR/USD will be limited around the previous day’s low at 1.0645, which is also coinciding with 21-DMA. The Relative Strength Index (RSI) is hovering around the soft ’50s, suggesting further upside room for EUR/USD.
Dwindling bets for aggressive rate hiking from Federal Reserve (FED) amid the Silicon Valley Bank’s (SVB) fallout is likely to keep the US Dollar trajectory to the downside, for time being. The next upcoming event, the US Consumer Price Index (CPI), will be key to watch for the pair, as it provides a narrative before heading into the March 22, FOMC meeting.