The EUR/USD pair advanced toward 1.0900 on Friday as renewed risk appetite weighed on the U.S. dollar (USD). The improving market sentiment reduced safe-haven demand, allowing the euro to gain traction in the European session. Traders are closely watching upcoming U.S. consumer sentiment data for March, which could further influence the currency pair’s direction.
At 10:30 GMT, EUR/USD traded 0.4% higher at 1.0892, reversing earlier losses. The decline in U.S. Treasury yields has contributed to the dollar’s weakness, with markets increasingly anticipating a softer Federal Reserve stance on interest rates in the coming months.
- U.S. 10-year Treasury yields fell to 3.98%, down from 4.05% earlier in the week.
- The dollar index (DXY) dipped 0.3% to 102.15, marking a two-week low.
- Eurozone inflation held steady at 2.6%, reinforcing expectations of a patient European Central Bank (ECB).
Technical Levels: Key Support and Resistance
EUR/USD recently dipped below the lower boundary of an ascending regression channel, while the Relative Strength Index (RSI) fell just below 50, indicating limited bullish momentum. To maintain upward traction, the pair needs to hold above key technical levels.
- Support Levels:
- 1.0800 (psychological and static support)
- 1.0730 (200-day simple moving average – SMA)
- Resistance Levels:
- 1.0850 (static level)
- 1.0900 (round number, key resistance)
- 1.0940 (next upside target)
A sustained break above 1.0900 could fuel further gains, while failure to hold above 1.0850 may increase selling pressure.
Market Awaits U.S. Consumer Sentiment Data
Investors are looking ahead to the University of Michigan’s Consumer Sentiment Index for March, which could impact USD demand. A sharp decline in consumer confidence may weaken the dollar further, supporting EUR/USD’s push toward 1.0900.
Additionally, market participants are monitoring geopolitical developments after former U.S. President Donald Trump threatened 200% tariffs on European wine and champagne imports. French Finance Minister Eric Lombard dismissed the remarks, calling them an “idiotic war.” These tensions could impact broader U.S.-EU trade relations, influencing market sentiment.
Meanwhile, U.S. stock index futures pointed to a 0.6%-1% increase, signaling a risk-on environment that could further weigh on the dollar. If Wall Street extends its rally, EUR/USD may continue its upward momentum into the weekend.