On Friday, April 15, in the London session, EUR/USD is trying to recover some of its previous losses.
- After falling to annual lows, the EUR/USD has slightly recovered over 1.08.
- The ECB maintained its interest rate and issued dovish advice.
- DXY is surging today, reaching its highest level since March 2020.
EUR/USD fundamental forecast
On Thursday, the EUR/USD pair witnessed a short-lived pullback after printing a fresh yearly low at 1.0757.
The euro fell sharply when the European Central Bank (ECB) declared that its interest rate policy would remain unchanged, as expected by the market.
Lagarde revealed the ECB’s interest rate guidance, noting that an interest rate rise will occur only after the ‘Asset Purchase Program’ (APP), which will finish in the third quarter.
A problematic scenario supports the dovish position on future policy announcements in Europe due to rising inflation, 7.5%, and a poor growth rate during the Ukraine conflict.
The ECB’s predicament is likely to deteriorate if oil prices rise and energy expenses affect European families.
All hail greenback
The DXY has recovered momentum in response to a stronger comeback in US Treasury rates. Given the extended weekend uncertainty in global markets, the DXY balances above 100.00 and is expected to extend gains. In addition, the 10-year US Treasury yield has recovered from a two-day losing run to recapture a three-year high of 2.83 percent.
Ukraine attacks Russia
As Russia’s invasion of Ukraine reached its ninth week, President Vladimir Putin was dealt a further blow with the loss of the Moskva, his Black Sea fleet’s flagship. The symbolic defeat comes as Russian soldiers prepare for a big invasion in eastern Ukraine.
While a ferocious fight raged in the southeast for control of the strategic port city of Mariupol, Russia’s military ministry pledged to intensify missile strikes on Kyiv once the Ukrainian capital had begun to recoup from Russian strikes.
Key data releases from EUR
On the European doc, we have a quiet day today.
Key data releases from the US
From the US, we also don’t have any significant event that can impact the movement of the USD.
Moving forward, the safe-haven status of the greenback, the situation between Ukraine and Russia, and the ECB’s dovish stance are the factors to watch.
EUR/USD technical analysis: bears picking up pace?
EUR/USD is now trying to stay above the 1.0800 level. The pair is way below its 100-day moving average on the daily chart, and the RSI is pointing downwards. So far, the pair has lost 0.18%.
EUR/USD is now hitting the 1.08084 level. A fall below 1.0805 will bring the pair towards the 1.0790 support level. If the pair falls below this level again, it will challenge the next support level, at 1.0766.
On the upside, the EUR can go towards the next resistance level, around 1.0933. A break over 1.1000 will pave the door for a test of the following resistance level of 1.1120.