The Euro and US Dollar pair have regained their strength and are now climbing above the 1.0850 level. Earlier in the day, the EUR/USD had failed to cross the 1.0800 and was on the back foot.
It appears that the market mood is improving, which is putting pressure on the US Dollar. In addition, the ISM PMI data is also awaited from the US, which is strengthening the Euro against the USD.
The recent intraday move in the EUR/USD has pushed the RSI indicator above 50 on the 4-hr chart. This is an indication that the EUR/USD sellers are showing signs of weakness.
In addition, the 23.6% level of the fib retracement is located at 1.0820, which is also serving as a support for the pair. So if the EUR/USD manages to close below 1.820, it will turn into a resistance.
In this case, the EUR/USD pair will then find support near the 1.0790 horizontal level with a chance to also test the 1.0760 level that correlates with 100 SMA.
On the contrary, a break above the 1.0860 resistance will open the doors to the 1.0900 resistance level, followed by 1.0930.
So far, the EUR/USD seems to have recovered what it lost during the Asian session. And if we look at the technical outlook, it appears there is no sign of a bearish momentum buildup so far as well. However, the buyers are also showing signs of hesitation since major US data is ahead.
If we look at the fundamentals affecting the EUR/USD, it appears that the OPEC+ announcement has also introduced more volatility to the pair.
Similarly, the CME's FedWatch Tool is also showing a 60% chance that the Fed will introduce a 25 bps rate hike. Just a few days ago, the probability of a rate hike was only standing at 48%.
It appears that the markets are now very cautious when it comes to the USD as well as the US stock index futures.