EUR/USD Looks Firm And Advances To New Highs Past 1.0900

The single currency keeps its relentless march north unabated for yet another session and motivates EUR/USD to climb to the 1.0925/30 band and record new multi-week tops on Thursday.

EUR/USD firmer post-Fed

EUR/USD advanced for the sixth session on Thursday on the back of the persevering selling pressure around the greenback, which in turn morphed into a new multi-week low for the USD Index (DXY) just below the 102.00 yardsticks earlier in the session.

The pair’s upside, in the meantime, appears reinforced by tailwinds following the dovish hike by the Fed at its Wednesday gathering, along with the equally downbeat message from Chair Powell at his press conference in the wake of the bank’s decision to raise rates by 25 bps.

The domestic calendar will only include the flash gauge of Consumer Confidence for the current month measured by the European Commission. In the US, usual weekly Claims are due along with the Chicago Fed National Activity Index and New Home Sales.

What to look for around EUR

EUR/USD maintains the optimism well and sound and now looks to consolidate the strong rebound past the 1.0900 barriers and with the immediate target at the so far 2023 highs near 1.1030.

In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB in a context still dominated by elevated inflation, although amidst dwindling recession risks for the time being.

Key events in the euro area this week: EMU Flash Consumer Confidence, European Council Meeting (Thursday) – European Council Meeting, EMU, Germany Flash PMIs (Friday)

Eminent issues on the back boiler: Continuation, or not, of the ECB hiking cycle. Impact of the Russia-Ukraine war on the region’s growth prospects and inflation outlook. Risks of inflation becoming entrenched.

EUR/USD levels to watch

So far, the pair is gaining 0.29% at 1.0886, and the break above 1.0929 (monthly high March 23) would target 1.1032 (2023 high February 2) en route to 1.1100 (ground level). On the flip side, there is initial support at 1.0730 (55-day SMA) followed by 1.0606 (100-day SMA) and, finally, 1.0516 (monthly low March 15).

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