Despite pulling back from its highest point of the day, the EUR/USD currency pair has still recorded slight gains. This marks the second consecutive day of increases.

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• EUR/USD prints mild gains despite retreating from intraday high, up for the second consecutive day.

The pair currently trades last at 1.10931.

The previous day high was 1.1107 while the previous day low was 1.1038. The daily 38.2% Fib levels comes at 1.1081, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1064, expected to provide support.

EUR/USD retreats from intraday high as it struggles to defend buyers around the 1.1100 round figure heading into Thursday’s European session. In doing so, the Euro pair remains firmer for the second consecutive day but lacks upside momentum amid a cautious mood ahead of the European Central Bank (ECB) monetary policy decision.

The recent growth and inflation data from Eurozone and Germany hasn’t been too positive, mostly suggesting recession, which in turn limits the ECB’s capacity to increase the benchmark interest rates even if markets are too hawkish. That said, the consensus suggests the bloc’s central bank to lift the benchmark rates by 0.25%. However, major attention will be given to ECB President Christine Lagarde’s speech as markets want to confirm future rate trajectory amid chatters of policy pivot.

That said, the US Dollar Index (DXY) prints a three-day downtrend despite the Federal Reserve’s (Fed) 0.25% interest rate hike, as well as readiness for an interest rate increase in September, amid fears of a sooner end to the tightening spell. Also likely to have weighed n the greenback could be expectations of witnessing further easing in the US data, which in turn will challenge the Fed from lifting the rates in September.

It’s worth observing that interest rate futures marked an increasing push towards a September Fed rate hike as the CME’s FedWatch Tool shows 23% chances of the same versus 21% marked on Tuesday and 13.7% a week ago. However, the odds of witnessing rate hikes past September have been mostly nil amid recently mixed data.

It should be noted that the Conference Board’s (CB) Consumer Confidence Index for July has been positive but the housing numbers for June are mixed. That said, the previously released inflation and employment clues haven’t been impressive and prod the US Dollar Index. Even so, the International Monetary Fund (IMF) raised the US economic growth forecast for 2023 to 1.8% from 1.6% forecasted in April, which in turn challenges the DXY sellers ahead of the first readings of the US Gross Domestic Product (GDP) for the second quarter (Q2). That said, the US Q2 GDP Annualized is expected to ease to 1.8% from 2.0%.

Additionally important to watch will be the US Durable Goods Orders for June, likely easing to 1.0% from 1.8% prior (revised), as well as German GfK Consumer Confidence and US Initial Jobless Claims.

A one-week-old bearish channel, currently between 1.1100 and 1.0990, restricts immediate EUR/USD moves ahead of the ECB Interest Rate Decision.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.1098 at the time of writing. Pair opened at 1.1086 and is trading with a change of 0.11% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.105, 50 SMA 1.0906, 100 SMA @ 1.0897 and 200 SMA @ 1.0708.

The previous day high was 1.1107 while the previous day low was 1.1038. The daily 38.2% Fib levels comes at 1.1081, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1064, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.1047, 1.1008, 1.0978
• Pivot resistance is noted at 1.1116, 1.1146, 1.1185

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