The EUR/USD struggles to hold onto early gains
The EUR/USD struggles to hold onto early gains, retreating slightly from a three-day high reached earlier in the European session. Despite some downward pressure, the pair remains supported by reduced expectations of swift ECB rate cuts and a softer US Dollar. The darkening outlook for the Eurozone economy limits aggressive bullish positioning for the Euro. Additionally, the growing consensus that the Federal Reserve will maintain higher interest rates for longer helps stabilize the USD.
Investors await crucial inflation data from both the Eurozone and the United States later this week, with flash CPI releases from Germany, France, and Spain on Thursday, along with the US PCE Price Index. Friday's key Eurozone inflation data will be highly influential ahead of the March 7 ECB policy meeting.
Technically, the overnight close above the 200-day SMA and subsequent upward movement favor bulls. Positive traction on daily chart oscillators further suggests an upward bias for the EUR/USD. Sustained buying above the 1.0865 region (38.2% Fibonacci retracement) could trigger a move towards last week's swing highs at 1.0885-1.0895, potentially targeting the 1.0920 zone (50% Fibonacci level) and extending towards the 1.1000 mark.
Conversely, the 200-day SMA (around 1.0830-1.0825) now provides initial downside support, followed by the 1.0800 mark (23.6% Fibonacci level). A decisive break below these levels would negate the bullish outlook, opening the door for losses towards the 1.0770-1.0765 area and potentially a retest of the three-month low near 1.0700.
Technically, the overnight close above the 200-day SMA and subsequent upward movement favor bulls. Positive traction on daily chart oscillators further suggests an upward bias for the EUR/USD. Sustained buying above the 1.0865 region (38.2% Fibonacci retracement) could trigger a move towards last week's swing highs at 1.0885-1.0895, potentially targeting the 1.0920 zone (50% Fibonacci level) and extending towards the 1.1000 mark.
Conversely, the 200-day SMA (around 1.0830-1.0825) now provides initial downside support, followed by the 1.0800 mark (23.6% Fibonacci level). A decisive break below these levels would negate the bullish outlook, opening the door for losses towards the 1.0770-1.0765 area and potentially a retest of the three-month low near 1.0700.