EUR/USD Bounces Back: Technical Analysis Points to a Potential..

EUR/USD Bounces Back: Technical Analysis Points to a Potential Long Setup

EUR/USD started the new week on an upward trajectory, recovering from Friday's pullback that saw it closing the week with over 1% gains. The currency pair is currently hovering around 1.0920, demonstrating resilience and aiming for further upside.

From a technical perspective, the price has retraced to the crucial 38% and 50% Fibonacci levels from the previous swing, finding support within a bullish channel in the H4 timeframe and maintaining position above the 50-day Moving Average. These indicators suggest a favorable setup for a new long position, aligning with the overarching bullish trend within the channel.

The Hawkish comments from New York Federal Reserve (Fed) President played a role in supporting the US Dollar, preventing a deeper pullback in EUR/USD. Despite a negative close on Friday, the current setup indicates renewed momentum for the pair, with potential opportunities for traders to capitalize on the upward movement.

Investors and traders will be closely monitoring developments, including any further comments from central bank officials, economic data releases, and geopolitical events, as they assess the currency pair's direction in the coming sessions.

Our preference

Long positions above 1.0800 with targets at 1.1010 & 1.1150 in extension.

Comment:

EUR/USD Shows Resilience on Fibonacci Rebound Amid Hawkish Fed Comments

As anticipated, the EUR/USD displayed a measured positive tone on Monday, executing a rebound within the 38.2% - 50% Fibonacci retracement area. This strategic move occurred within the confines of a well-defined Bullish channel, emphasizing the pair's commitment to its Uptrend trajectory.

Fibonacci Resilience:
The moderate positive tone observed in the EUR/USD aligned seamlessly with our earlier forecast, witnessing a rebound precisely within the 38.2% - 50% Fibonacci retracement area. This strategic retracement within the Bullish channel highlights the market's adherence to technical levels, providing valuable insights for traders navigating this currency pair.

USD Dynamics:
Contrary to recent hawkish comments by Federal Reserve officials, including Chicago Fed President Austan Goldsbee, expressing reservations about an imminent commitment to rate cuts, the US Dollar failed to garner significant momentum. US bond yields persist near multi-month highs, and traders are factoring in potential rate cuts in March. This environment has effectively curtailed the aspirations of US Dollar bulls, contributing to the EUR/USD's resilient performance.

Anticipated Swing Continuation:
Amidst these dynamics, the EUR/USD appears poised for a swing continuation, with a targeted range between 1.10100 and 1.11500. The sustained positive tone, coupled with the favorable Fibonacci rebound, positions the currency pair for further upside within its established Uptrend.

Forward Outlook:
Traders are closely monitoring the pair's response to ongoing developments, especially considering the nuanced interplay between technical levels and fundamental factors. The Euro's resilience, even in the face of hawkish signals from the Fed, underscores the complex dynamics at play in the current currency market landscape.

In conclusion, the EUR/USD's recent performance aligns with our earlier forecast, showcasing resilience within the Fibonacci retracement zones. As the pair eyes a swing continuation, traders remain vigilant to evolving market dynamics and potential catalysts that could shape its trajectory in the coming sessions.