Risk-On Sentiment, EUR/USD Reaches 120 Pips Daily Increase!


 Changes in current market sentiment are seen driving trading on Wednesday yesterday, which saw the US dollar trade weak.

Falling short of investor expectations for the US dollar to strengthen again, market sentiment was restored by the positive development of the world's second largest economy, namely China, following the release of the latest manufacturing and service sector data.

The reading, which remained above the 50.0 point level, continued to record a higher increase than forecast for February.

This shows the effectiveness of China ending the previous zero Covid strategy and anticipating the reopening of the country's economy.

The ISM survey data of the manufacturing sector of the United States (US) published in the New York session yesterday is also seen not to support the movement of the US dollar.

The Euro currency took advantage of the room to continue strengthening supported by German inflation data readings published in the European session yesterday, signaling for the European central bank (ECB) to continue tightening monetary policy.

Thus, investors have seen the bullish pattern maintained on the price chart of the EUR/USD currency pair yesterday.

The price made an increase above the 1.06000 level again and almost touched the expected level of 1.07000.

The level remains functioning as a resistance zone for the price when it appears that the price started to slow down below the zone at the close of trading in the New York session.

Slow movement continued trading in the Asian session this morning (Thursday), but the price above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the EUR/USD chart gives a bullish indication.

Expectations for the increase if it continues will test the resistance of 1.07000 before breaking through to higher levels.

Next, the target for the continued increase is at the height of 1.08000 which is also the focus level tested before.

However, if the price fails to break above 1.07000, it is possible that the price decline could happen again if the market sentiment starts to change and the US dollar dominates again.

The falling price will return to the 1.06000 level or continue a further decline to the support level at the beginning of the week around 1.05300.