As expected, risk appetite returned; yesterday, the S&P 500 rose by 0.88%, Euro Stoxx 50 by 1.15%, the yield on 5-year US government bonds has been rising for the 4th consecutive day, oil has gained 1.89%, and the US Dollar Index is down by 0.02%.
The euro spent the Thursday session in a 58-pip range, closing the day with a symbolic loss. Perhaps, this was in anticipation of European Central Bank President Christine Lagarde’s speech in Davos. But everything she wanted to say has already been said – the ECB plans to lower rates in the summer, and investors have taken this into account, which balances with the Federal Reserve’s position.
From a technical perspective, nothing has changed on the EUR/USD daily chart over the past day. If the price breaks above the resistance at 1.0905 and stays above it, it will open the target range of 1.1033/76. An alternative scenario would open up if the price breaches the support at 1.0825, which could push the pair to fall towards 1.0730.
On the 4-hour chart, a convergence has formed and it is not very strong. Nevertheless, this is a sign of the end of the bearish correction. We can confirm the pair’s growth in the medium-term once the price settles above the level of 1.0905. The MACD line is approaching this level, so the resistance is quite important.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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