EUR/USD Strengthens Over 1.1011, Weakens Under 1.0963

The Euro is edging higher against the U.S. Dollar on Tuesday on hopes of progress in peace talks between Ukraine and Russia, while U.S. Treasury yields and the U.S. Dollar weakened ahead of the Federal Reserve interest rate decision on Wednesday.

At 15:02 GMT, the EUR/USD is trading 1.0989, up 0.0048 or +0.44%. The Invesco CurrencyShares Euro Trust ETF (FXE) is at $101.57, up $0.37 or +0.37%.

Reuters is reporting that one of Ukrainian President Volodymyr Zelenskiy’s top aides said the war would be over by May – and could even end within weeks – as Russia had effectively run out of fresh troops to keep fighting.

Treasury yields and the dollar were lower despite nearly 100% certainty the U.S. Federal Reserve will raise rates for the first time since the COVID-19 pandemic at its meeting which concludes on Wednesday. With the rate hike already priced in, traders will really be looking for indications about the pace of future monetary tightening. Some analysts are looking for as many as seven rate hikes this year.

In economic news, the common currency lost ground briefly after a survey showed on Tuesday German investor sentiment suffered a record slide in March, due to the war in Ukraine and economic sanctions on Russia, making a recession in Europe’s largest economy “more and more likely”.

Daily Swing Chart Technical Analysis

The main trend is down, however, momentum shifted to the upside following the confirmation of Monday’s minor closing price reversal bottom. The possible formation of a secondary higher bottom could also be a sign of a shift in momentum.

A trade through 1.1121 will change the main trend to up. A move through 1.0806 will signal a resumption of the downtrend.

The minor trend is also down. The new minor bottom is 1.0901.

The market is currently trading between a pair of 50% levels at 1.0963 and 1.1011.

On the upside, the key resistance is a pair of 50% levels at 1.1098 and 1.1151. In between these levels is the main top at 1.1121.

Daily Swing Chart Technical Forecast

If counter-trend buyers can trigger a breakout over 1.1011 then look for the ensuing short-covering rally to possibly extend into the resistance cluster at 1.1098 to 1.1151.

If trend-trading sellers can fuel a breakdown under 1.0963 then look for a quick test of the minor bottom at 1.0901. This is a potential trigger point for an acceleration into the nearest main bottom at 1.0806.