MAs Start to Turn into Support in EUR/USD As Sentiment Shifts

The rate of EUR to USD was declining for about two months, but in the last two weeks, buyers have been in charge. The uptrend is not too convincing, but they have been pushing the lows higher, and moving averages are now turning into support on the H4 chart, as shown below.

EUR/USD Chart H4 – The 100 SMA Is Now Holding the Dips

After hitting a low of 1.06, EUR/USD reversed and has been bullish for three weeks. Last week, it surpassed the 1.07 barrier level, signaling potential positive momentum. However, the repeated rejection at the 1.0750 level indicates significant resistance in that area. Today’s unemployment statistics from Spain, Italy, and the Eurozone, along with the French Industrial Production report, did not provide much encouragement for the Euro to rally.

Recent statements from ECB members suggest that the ECB should initiate its easing cycle in the June meeting are sparking speculation of 75 basis points of interest rate reductions in 2024. Looking forward, the Eurozone’s somewhat subdued economic fundamentals, coupled with the resilience of the US economy, support expectations for a stronger Dollar in the medium term. This is especially true considering the increasing likelihood of the ECB cutting rates before the Fed.

Eurozone Unemployment Rate for April

EUR/USD Live Chart