The EUR/USD pair staged a recovery on Monday, snapping a three-day losing streak and bouncing from a two-week low of 1.0360 reached on Friday. The pair climbed beyond the 1.0400 level during the Asian session, supported by renewed weakness in the US Dollar (USD).
Technical Indicators Signal Further Upside Potential
From a technical standpoint, EUR/USD displayed resilience below the 50% Fibonacci retracement level of February’s rally. The subsequent push above the 38.2% retracement signals that the recent pullback from the 1.0525-1.0530 zone, which marked a one-month high last week, may have concluded. This area also aligns with the 100-day Simple Moving Average (SMA), serving as a key pivot point for short-term market sentiment.
However, daily chart oscillators have yet to confirm a bullish bias, prompting caution among traders amid lingering concerns over former US President Donald Trump’s tariff proposals. Despite this, the pair appears poised to challenge the 1.0450 resistance zone, which corresponds with the 23.6% Fibonacci retracement level. A decisive break above this barrier could pave the way for a test of the 1.0500 psychological mark.
Downside Risks Remain in Focus
On the downside, immediate support is seen near the 1.0370 level, coinciding with the 50% Fibonacci retracement. Further selling pressure could drive the pair towards the 61.8% retracement at 1.0330, followed by the 1.0300 psychological threshold. A deeper decline would expose the 1.0285 region and the February swing low at 1.0210, with the potential to extend towards the January two-year low around 1.0180-1.0175.
Market participants will closely monitor US economic data, including the ISM Manufacturing PMI and Nonfarm Payrolls later in the week, for fresh directional cues.
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