- The shared currency bulls have shifted into a positive trajectory after climbing above parity.
- Investors are underpinning the euro bulls as hawkish ECB bets soar.
- Advancing 20-EMA adds to the upside filters.
The EUR/USD pair is displaying back-and-forth moves in a narrow range of 1.0073-1.0088 in the early Asian session. The asset has turned sideways after a perpendicular rally as positive market sentiment improved demand for risk-perceived currencies.
The major is expected to remain in the grip of bulls ahead of the interest rate decision by the European Central Bank (ECB). As per the projections, ECB President Christine Lagarde may announce a rate hike by 75 basis points (bps).
The US dollar index (DXY) plunged further on Wednesday to near 109.60 as the appeal for safe-haven assets trimmed dramatically. Also, the alpha generated by 10-year US government bonds plummeted to 4%.
On a four-hour scale, the shared currency bulls have strengthened after shifting their business above the horizontal support placed around October highs at parity, which has become a support now. Now, the euro bulls are eyeing to smash a two-month high at 1.0200 ahead.
The 20-period Exponential Moving Average (EMA) at 0.9950 is aiming higher, which adds to the upside filters.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates more upside ahead.
A minor corrective move to near September 20 high at 1.0051 will be a bargain buy for the market participants. This will send the asset firmly towards August 3 low at 1.0123, followed by a two-month high at 1.0200.
On the flip side, the greenback bulls will grab attention if the asset drops below October 25 low at 0.9848. It may drag the asset toward October 20 low at 0.9755 and Friday’s low at 0.9705.