The EUR/USD pair has extended its recovery from the 1.1000 psychological level, a nearly four-week low, and is seeing continued buying interest on Friday. The currency pair has risen to the upper end of its weekly range, approaching 1.1090 during the Asian session, driven by broad-based weakness in the US Dollar (USD).
The recent US Producer Price Index (PPI) report, which came in weaker than expected, has fueled speculation for a larger interest rate cut by the Federal Reserve (Fed) in their upcoming meeting. This development, combined with a positive risk environment, has pushed the USD to its lowest point in over a week, benefiting the EUR/USD pair. Meanwhile, the European Central Bank (ECB) has chosen not to provide explicit interest rate guidance, which supports the euro and bolsters the EUR/USD pair’s upward momentum.
Technically, the EUR/USD is trading near the upper boundary of a descending trend channel that has persisted for over three weeks. A sustained break above this level could signal the end of the recent corrective decline from last month’s peak, potentially leading to further gains. The next significant resistance for the pair is around 1.1155, with the 1.1200 round-figure mark serving as a longer-term target.
Conversely, immediate support is found in the 1.1065-1.1060 range, with crucial support at the 1.1000 level. A decisive break below this could activate bearish trading strategies and prompt a more aggressive sell-off, potentially driving the EUR/USD towards sub-1.0900 levels, with interim support around 1.0950.
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