EUR/USD Pulls Back to 1.2077 After Setting New Monthly Highs

Free $100 Forex No-Deposit Bonus

The EUR/USD currency pair on Wednesday rallied to hit a new monthly high of about 1.217 before plunging to trade at around 1.2040 in the afternoon. The pair recovered late on to settle at around 1.2077 during a highly volatile session.

The currency pair is now pinned just below the 38.20% fib level on the way up following the late February plunge that bottomed below the 1.2000 level on Tuesday. The pair remains below the 100-hour and the 200-hour SMA lines in the 60-min chart.

EUR/USD Fundamentals Overview

From a fundamental perspective, the EUR/USD currency pair is trading ahead of a relatively busy period in both the EU and the US markets. On Tuesday, the preliminary EU core CPI for February matched the expected (YoY) change of 1.1%. The general CPI for the same period came short of the expected (YoY) change of 1% with a change of 0.9%. On Wednesday, the EU Markit PMI Composite for February outshone the expectation of 58.1 with 58.8. The services PMI also outperformed while the producer price index for January outperformed on both the (MoM) and (YoY) basis.

In the US, the ADP Employment Change for February missed the expectation of 177k jobs with 117k. The ISM Services PMI for the month also came short of 58.7 with 55.3. The ISM Services New orders Index also came short of expectations while Services Employment Index and Prices Paid both outperformed expectations. Earlier in the week, the US ISM Manufacturing PMI for February beat the expectation of 58.8 with 60.8. The ISM Manufacturing Prices Paid and New Orders Index also outshone expectations.

EUR/USD Technical Analysis (the 60-min Chart)

Technically, the EUR/USD currency pair appears to have recently bounced off new 3-week lows following the end February plunge. It is now pinned just below the 38.20% fib level on the way up. 

The bulls will be looking to extend the current short-term recovery towards 1.2117 or higher at 1.2146. On the other hand, the bears will look to retain short-term control by targeting profits at around 1.2051 or lower at 1.2024.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the EUR/USD currency pair appears to be trading within a sharply ascending wedge formation. This indicates a significant long-term bullish bias in the market sentiment.

The bulls will be looking to retain long-term control of the pair by targeting profits at around 1.2197 or higher at 1.2303. On the other hand, the bears will look to pounce on pullbacks at around 1.980 or lower at 1.1884.

Copyright © 2021. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.