EUR/USD

EUR/USD Current price: 1.0870

The unwind of the "Trump trade" gathered momentum this Monday, resulting in the EUR/USD pair rallying to a fresh yearly high of 1.0905 at the beginning of the US session. Risk aversion dominated the Asian and European sessions, after the US GOP decided to pull out the healthcare bill set to overhaul the Obamacare late Friday. Speculative interest is now wondering if the US new administration will be able to push forward its pro-growth agenda, promised during the campaign.

The common currency gapped lower at the weekly opening, further rallying after London's opening after the release of a better-than-expected German IFO confidence survey, which showed that than business sentiment unexpectedly improved in March, up to 112.3 from a previous 111.1, the highest reading since mid 2011. The US released a minor report, the Dallas Fed manufacturing index, which fell in March to 16.9 from previous 24.5, while a Fed's Evan hit the wires, adding nothing new on monetary policy to what the market already knew.

The dollar recovered some ground in the US afternoon as Wall Street bounced from fresh six-week lows, but overall remains subdued, and at risk of falling further. The 4 hours chart for the EUR/USD pair shows that the price is well above the 1.0820/30 region, the 50% retracement of the post-US election's decline and former yearly high, while the 20 SMA keeps advancing below it. Technical indicators in the mentioned chart have lost upward strength, pulling modestly lower within overall readings, not enough to suggest further declines ahead. Buying interest is likely waiting in the mentioned 1.0820/30 region, although a break below it could result in a slide down to 1.0790, where the pair will fill the weekly opening gap.

Support levels: 1.0765 1.0730 1.0700

Resistance levels: 1.0830 1.0870 1.0910