During early European trading hours on Wednesday, the EUR/USD pair extended its upward momentum, hovering around 1.0825. This surge in the major pair is fueled by optimistic readings from the ZEW Economic Sentiment Survey and a softer US Dollar (USD). Market participants are keenly observing the upcoming Eurozone GDP growth data, anticipated to show a 0.3% quarter-on-quarter expansion in the first quarter of 2024.
Analysis of the daily chart reveals that the EUR/USD has been confined within a descending trend channel since mid-December 2023. However, the bullish sentiment of the major pair has resumed as it breaches above the crucial 100-day Exponential Moving Average (EMA). Furthermore, the 14-day Relative Strength Index (RSI) remains in bullish territory around 60.80, suggesting favorable prospects for further upside movement.
Breaking above the upper boundary of the descending trend channel and the psychological barrier of 1.0800, the major pair faces its next resistance level at the April 9 high of 1.0885. Subsequent upside targets include the March 21 high at 1.0943, followed by the March 8 high at 1.0981, and ultimately the significant psychological level of 1.1000.
Conversely, initial downside pressure for the EUR/USD pair is expected near the 100-day EMA, situated at 1.0795. Continued selling below this level may lead to a decline towards the May 9 low of 1.0724. Further downward movement could find support around the May 2 low of 1.0650, followed by the April 16 low at 1.0600.
