The EURUSD currency pair rises above a level not seen in over two months and gains strength due to ongoing selling pressure on the US dollar.

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• EUR/USD climbs to over a two-month high and draws support from sustained USD selling.

The pair currently trades last at 1.10271.

The previous day high was 1.1027 while the previous day low was 1.0977. The daily 38.2% Fib levels comes at 1.1008, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0996, expected to provide support.

The EUR/USD pair trades with a positive bias for the fifth successive day on Wednesday and climbs to the 1.1030 region, or its highest level since May 8 during the Asian session.

The momentum is sponsored by the prevailing selling bias surrounding the US Dollar (USD), which is seen prolonging its recent downtrend witnessed over the past week or so and dropping to a fresh two-month low. Several Federal Reserve (Fed) officials said on Monday the US central bank will likely need to raise interest rates further to bring down inflation, though indicated that the end of the current monetary policy tightening cycle is getting close. This leads to a further decline in the US Treasury bond yields and continues to weigh on the buck. Apart from this, a generally positive risk tone further undermines the safe-haven Greenback and lends support to the EUR/USD pair.

Bullish traders, meanwhile, seem rather unaffected by Tuesday’s disappointing release of the German ZEW Economic Sentiment Index, which fell to -14.7 in July from -8.7 in the previous month and missed expectations. This, however, was largely offset by German consumer inflation figures, which confirmed the rebound in June after three months of moderation. In fact, the German CPI was finalized to show a 0.3% rise on a monthly basis and 6.4% over the last twelve months, up from the previous month’s reading of 0.1% and 5.4% respectively.

The data reinforces the likelihood of additional interest rate hikes by the European Central Bank (ECB), which, in turn, is seen as another factor acting as a tailwind for the shared currency. It will now be interesting to see if the EUR/USD pair can capitalize on its recent rally from the vicinity of the 100-day Simple Moving Average (SMA) support or if bulls opt to lighten their bets ahead of the US consumer inflation figures. The key US CPI report is due for release later during the early North American session and influence the near-term USD price dynamics.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.1029 at the time of writing. Pair opened at 1.1009 and is trading with a change of 0.18 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.0923, 50 SMA 1.086, 100 SMA @ 1.0836 and 200 SMA @ 1.0632.

The previous day high was 1.1027 while the previous day low was 1.0977. The daily 38.2% Fib levels comes at 1.1008, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0996, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.0981, 1.0954, 1.0931
• Pivot resistance is noted at 1.1032, 1.1055, 1.1082

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