EUR/USD Teeters on Break Above Key Resistance
The EUR/USD price is struggling to extend its earlier gains on Wednesday after the US Treasury's bond-buyback announcement caused some volatility in the market. The announcement pushed up Treasury yields, helping the US Dollar trim its losses. As a result, the pair trades around 1.1640 as it attempts to break above the 200-day Simple Moving Average (SMA) at 1.1633.
According to strategists at Scotiabank, policy expectations remain firmly supportive ahead of this week's ECB decision. They anticipate a hawkish hike tomorrow, with President Lagarde unveiling the latest forecast and signaling ongoing concern about upside risk. This is expected to underpin the recent recovery in EUR/USD.
The technical perspective suggests that EUR/USD retains a constructive bias, holding above the 50-day and 100-day SMAs and marginally above the 200-day SMA. Price has formed a sequence of higher highs and higher lows since recovering from below 1.1400 in late July. However, buyers still need a decisive break above the 200-day average to strengthen the bullish outlook.
The daily Relative Strength Index (RSI) is steady above the neutral 50 level and points higher near 58, indicating healthy but not excessive bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) remains slightly below zero, with a fading red histogram suggesting easing bearish pressure.