Euro makes significant gains against US Dollar due to decline in Dollar index

Statements by Muller have supported the rise of the Euro

By Laila Eid | @Laila Eid | 29 March 2023

  • The euro has maintained support at 1.0750 and rebounded strongly from it

  • Expectations for a successful test of the euro/dollar peak at 1.0930 are high

  • Fears of a recession are depressing the dollar index

The decline of the dollar index is contributing to the rise of the EUR/USD pair

Benefiting from the decline of the US dollar index, the euro has risen significantly against the US dollar since the beginning of the week and is now trading near levels of 1.0832. Madis Muller, a member of the European Central Bank, said on Tuesday that the central bank needs to make more effort and tighten monetary policy further to control inflationary pressures. This move has supported the rise of the euro/dollar pair. The US dollar index is facing more pressure against the backdrop of fears of an economic recession as expectations grow about the end of monetary tightening.

The Key Pivot Levels for the EUR/USD Pair

After breaking out of the horizontal channel and reaching a peak around 1.0930, the euro/dollar pair fell to test 1.0750, which had previously been a resistance level that had turned into a support level. The pair was successful in maintaining and rebounding from this level, which has extended its rise to currently trade around 1.0860.

It is likely that the pair's rise will continue to test the peak of 1.0930, and if it successfully surpasses it, this may contribute to further extending the rise to test the stronger resistance and peak achieved by the pair in February around the level of 1.1030. The main support level for the pair is at around 1.0750, and it is important for the pair to remain above this level to demonstrate its intention to rise. However, if it breaks and prices remain below this level, this may contribute to further pressure and a decline for the pair to test levels of 1.0650. Breaking this level may extend the decline further to test the strongest support level of 1.0525.

eur usd 29-3-2023