EUR/USD to see renewed gains behind favorable technical developments

EUR/USD has been edging lower as US yields have been rising. The dollar's next move hinges on the next move by the central bank but that is due out only on Wednesday – the perfect conditions for tense trading on Tuesday. Nevertheless, euro bulls may rage earlier, FXStreet’s Analyst Yohay Elam reports.

Speculation about the Fed, US data and virus developments are eyed

“Returns on 10-year Treasuries has edged up to 1.58%. However, without any trigger to rise, the ebb and flow of markets may result in a slide back to the bottom of the range – or at least under 1.55%. That could soften the greenback.” 

“Durable Goods Orders for March missed estimates with a meager 0.5% increase – contrary to other upbeat statistics for last month. The Conference Board publishes its Consumer Confidence gauge for April. Are expectations too high there as well?”

“COVID-19 cases are edging lower and countries are gradually reopening. More importantly, the EU is receiving larger shipments of the Pfizer/BioNTech jabs beginning this week, so reports of an accelerating vaccination rate could also support the euro.”

“Euro/dollar continues benefiting from upside momentum on the four-hour chart while the Relative Strength Index (RSI) has drifted away from 70 – thus outside overbought territory. The currency pair continues trading above the 50, 100 and 200 Simple Moving Averages.” 

“Some resistance awaits at 1.2080, which was a peak in mid-April. The recent peak of 1.2117 is the next level to watch. Support awaits at 1.2050, which was a swing high several weeks ago. The round 1.20 line is a significant cushion.”