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MTrading Team • 2023-12-14

EURUSD bulls approach 1.0970 hurdle ahead of ECB

EURUSD bulls approach 1.0970 hurdle ahead of ECB

EURUSD prints a four-day winning streak while refreshing the monthly high around 1.0915 as traders await the European Central Bank’s (ECB) monetary policy announcements on early Thursday. The Euro pair’s latest recovery takes clues from the US Federal Reserve’s (Fed) dovish halt, as well as the upbeat RSI and MACD signals. Adding strength to the upside bias is the quote’s successful trading beyond the 100-SMA. With this, the major currency pair is likely to extend the previous week’s recovery toward the 1.0970 resistance confluence comprising a downward-sloping resistance line from July and a 61.8% Fibonacci retracement of July-October fall. Apart from the 1.0970, the 1.1000 psychological magnet and the previous monthly high of around 1.1020 also act as additional upside filters, a break of which will allow the bulls to challenge the yearly peak of 1.1275 marked in July.

On the flip side, the 50% and 38.2% Fibonacci ratios, surrounding 1.0865 and 1.0760 respectively, restrict the immediate downside of the EURUSD pair. Following that, the 100-SMA and the 50-SMA will challenge the Euro bears near 1.0750 and 1.0730 in that order. It’s worth noting, however, that a horizontal area comprising multiple levels marked since late May, close to 1.0670, appears a tough nut to crack for the pair sellers to break afterward.

Overall, the EURUSD pair appears all set to poke the 1.0970 hurdle but the quote’s further upside hinges on the ECB’s hawkish move, which is less likely to happen.

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