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EUR/USD Holds Onto Gains Near 1.0800 on Easing Banking Sector Fears

ByAlex Boltyan
Published 03/27/2023, 01:57 PM
Updated 07/09/2023, 06:32 AM

The EUR/USD pair holds onto modest daily gains just below 1.0800 on Monday as easing banking sector fears lifted investors’ sentiment, while German IFO data showed improvement in expectations in March. 

At the time of writing, the EUR/USD pair is trading at 1.0790, 0.3% above its opening price. On the other hand, the US Dollar Index (DXY) is trading 0.2% down on the day at the 102.90 area.

News that First Citizens Bancshares Inc. has bought defunct lender Silicon Valley Bank (SVB) eased concerns surrounding the banking crisis, helping the sector’s equities rebound.

Germany reported the IFO Business Climate Index, which came in at 93.3, beating the consensus forecast of 90.9 and increasing from the previous figure of 91.1. The report also showed that the Current Assessment and Expectations indexes also came in better than expected at 95.4 and 91.2, respectively.

Across the pond, US bond yields advance sharply on Monday amid the better market mood. The 10-year note yield stands at 3.51%, up by over 4% on the day. In addition, Wall Street indexes opened higher, with the S&P 500 and the Dow Jones trading in the green, although the Nasdaq has dipped into the red.

EUR/USD Daily Chart

From a technical perspective, the EUR/USD pair maintains a positive short-term bias, according to indicators on the daily chart, while the price remains above its main moving averages despite the recent downward correction.

In terms of technical levels, the EUR/USD needs to decisively break above 1.0900 to reignite the bullish momentum, targeting the February high at 1.1032. On the flip side, immediate support levels could be found at the 1.0710-00 zone and the 20-day SMA at around 1.0675.

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