During Tuesday’s Asian trading session, the EUR/USD pair found new buyers around the 1.1710 mark, continuing its recovery from a low of 1.1660—a level it hadn’t hit in nearly four weeks. Currently, the price sits at approximately 1.1735, reflecting a slight increase of 0.10% on the day, with potential for further gains grounded in supportive economic conditions.
For the second consecutive day, the U.S. dollar weakened amid dovish sentiments concerning the Federal Reserve, following a peak not seen since December 10. Furthermore, the expectation that the European Central Bank (ECB) might soon finish its interest rate cuts seems to bolster the euro, providing a beneficial backdrop for the EUR/USD pair.
Strength observed intraday above the level of 1.1735—a confluence point that includes the 100-hour simple moving average and the 50% Fibonacci retracement of the recent downward move—suggests a positive outlook. Additionally, the Moving Average Convergence Divergence (MACD) indicator has transitioned into positive territory and is slowly increasing, pointing to improved upward momentum.
The Relative Strength Index (RSI) hovers around 59, while the Fibonacci index is at 61.8%. These factors support the potential for further gains. The retracement level appears to be situated in the mid-1.1700s, which could serve as the next resistance. A breakthrough past these levels may fortify the ongoing correction; conversely, failure to do so could result in the EUR/USD consolidating within its recent range.
