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Mar 26
2024

EUR/USD Forecast: Euro could face next resistance at 1.0860

  • EUR/USD holds steady near 1.0850 after closing in the green on Monday.
  • Euro could face resistance at 1.0860 before targeting 1.0890-1.0900.
  • Improving risk mood could help the pair stretch higher.

EUR/USD fluctuates at around 1.0850 in the early European session on Tuesday after closing in positive territory on Monday. Improving risk mood could make it difficult for the US Dollar (USD) to find demand and help the pair extend its recovery in the near term.

Euro price this week

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the Swiss Franc.

The modest selling pressure surrounding the USD allowed EUR/USD to gain traction at the beginning of the week.

Federal Reserve Bank of Chicago President Austan Goolsbee said on Monday that three rate cuts in 2024 is in line with his thinking. Commenting on the policy outlook, "there are risks to easing policy too much or too soon, as well as too late," Fed Governor Lisa Cook said. These mixed comments failed to trigger a noticeable market reaction.

Later in the day, the US Census Bureau will release Durable Goods Orders data for February. Investors expect an increase of 1.3% following the 6.2% contraction recorded in January. Although the initial reaction to an upbeat reading could support the USD, the currency's gains could remain limited unless there is a negative shift in risk mood.

In the early European session, US stock index futures are up between 0.2% and 0.4%. A bullish opening in Wall Street could open the door for EUR/USD to stretch higher.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart recovered to 50, reflecting a loss of bearish momentum. On the upside, 1.0860 (Fibonacci 38.2% retracement of the latest uptrend) aligns as first resistance before 1.0890-1.0900, where the 100-period Simple Moving Average (SMA) and the Fibonacci 23.6% retracement level align.

Immediate support is located at 1.0840-1.0830 (200-period SMA, Fibonacci 50% retracement) ahead of 1.0800 (Fibonacci 61.8% retracement).

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