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Impulsive advance has room to extend to 1.0530; a clear break above this level appears unlikely. In the longer run, rejuvenated upward momentum suggests Euro (EUR) could continue to advance vs US Dollar (USD); the levels to monitor are 1.0530 and 1.0560, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

EUR can continue to advance 1.0530 and 1.0560

24-HOUR VIEW: "Two days ago, EUR fell to a low of 1.0400. Yesterday, when EUR was at 1.0425, we indicated that 'despite the decline, there has been no significant increase in downward momentum,' and we held the view that it 'is likely to trade in a 1.0395/1.0455 range.' Instead of trading in a range, EUR jumped and closed higher by 0.76% (1.0500). While deeply overbought, the impulsive advance has room to extend to 1.0530. Given the overbought conditions, a clear break above this level appears unlikely. To sustain the momentum, EUR must not break below 1.0455 (minor support is at 1.0475)."

1-3 WEEKS VIEW: "We revised our view from positive to neutral yesterday (20 Feb, spot at 1.0425), indicating that EUR 'appears to have moved into a range trading phase, and it is likely to trade between 1.0350 and 1.0500 for the time being.' We did not expect the subsequent strong surge that reached a high of 1.0503. Upward momentum has been rejuvenated, suggesting EUR could continue to advance. That said, there are a pair of major resistance levels at 1.0530 and 1.0560. Overall, only a breach of 1.0425 would invalidate our view."

Source: FXSTREET

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, maintains its ground around 106.50 during the early European hours on Friday. However, the analysis of the daily chart indicates a bearish bias, with the index consolidating within a descending channel pattern.

The 14-day Relative Strength Index (RSI) remains below the 50 level, signaling a strengthening bearish momentum. Additionally, the US Dollar Index is trading below the nine- and 14-day Exponential Moving Averages (EMAs), reinforcing a weakening short-term price trend.

On the downside, the US Dollar Index may test the lower boundary of the descending channel at 106.10, followed by the key psychological level of 106.00. A break below this critical support zone could strengthen the bearish bias, potentially driving the index toward the three-month low of 105.41, last seen on December 6.

The DXY's primary resistance stands at the nine-day EMA at 107.00, followed by the 14-day EMA at 107.24. A decisive break above these levels could strengthen short-term price momentum, potentially pushing the index toward the descending channel’s upper boundary at 109.40, with the next key resistance at the five-week high of 109.80, last tested on February 3.

US Dollar Index: Daily Chart

Source: FXSTREET

Gold is on display at Korea Gold Standard in Seoul, Wednesday. 

Copper prices are climbing, propelled by the recent sustained rally of gold and silver amid investors’ preference for safe-haven assets, market watchers said Friday.

Underpinning the upward trajectory is risk-off sentiment, brought on and amplified by Trump tariff uncertainties and delayed hopes of swift easing by the U.S. Federal Reserve.

Many say the relatively undervalued commodity will have further room to increase, unlike gold that nearly peaked before a correction followed by a potential downtrend.

According to the U.S. Commodity Exchange (COMEX), a futures and options market for trading metals such as gold, silver and copper, copper rose 12.29 percent year-to-date.

Silver and gold over the same period increased 14.12 percent and 11 percent, respectively.

Gold exchange-traded funds (ETFs) climbed 47.24 percent last year.

However, the figures for silver ETFs and copper ETFs were limited to 16.43 percent and 1.75 percent, respectively, leaving room for further profit.

A Daishin Securities report said gold is nearing its peak.

“The previous high of $2,946 per ounce is nearly reached. A short-term overshoot to the $3,000 level is possible, but a wave of profit-taking can follow due to pressure from the high level,” the report said.

A Meritz Securities report said strong global copper prices are likely, aided by sustained demand from the U.S. before Trump's tariffs imposition.

“The U.S. move to increase copper storage will drive demand,” the report said.

The Comex April gold contract came to $2,950.90 per troy ounce, Tuesday (local time), up 1.73 percent, or $50.2.

Source: Koreatimes

The EUR/USD pair is hovering around 1.0503, extending its rally since midweek. The major currency pair has climbed to a two-month high, with market sentiment favouring further gains.

Key drivers behind EUR/USD’s rise

A decline in US Treasury bond yields has weighed on the US dollar, following a series of weaker-than-expected US economic reports and dovish remarks from Federal Reserve officials.

Austan Goolsbee, President of the Federal Reserve Bank of Chicago, stated that he does not expect the Core Personal Consumption Expenditures (PCE) index to be as concerning as the recent Consumer Price Index (CPI) data. As a key inflation measure for the Federal Reserve, the Core PCE significantly influences monetary policy expectations.

Meanwhile, St. Louis Fed President Alberto Musalem warned of stagflation risks and the potential challenges in setting future policy.

The latest US jobless claims data further raised concerns, showing an increase to 219,000 from the previous 213,000, exceeding the forecast of 214,000.

In the eurozone, the euro could see further upside if the German election outcome triggers additional short-covering in EUR/USD.

Technical analysis of EUR/USD

On the H4 chart, EUR/USD has completed a growth wave to 1.0470, forming a consolidation range around this level. The market has since broken higher, paving the way for further gains towards 1.0544. A correction towards 1.0385 may follow after reaching this level. The MACD indicator supports this scenario, with its signal line above zero and pointing upwards, indicating continued bullish momentum.

On the H1 chart, the pair executed a growth wave to 1.0470, followed by a narrow consolidation range around this level. The likelihood of an upward breakout towards 1.0520 remains high. After reaching this level, a correction to 1.0470 could occur before the growth wave resumes towards 1.0544. The Stochastic oscillator confirms this outlook, with its signal line above 80 and trending towards 20, suggesting a possible pullback before further gains.

Conclusion

EUR/USD remains in an uptrend, supported by weakening US Treasury yields and a cautious Fed outlook. If bullish momentum continues, the pair may extend gains towards 1.0544. However, a corrective move could follow before further upside. The outcome of the German election could also influence short-term price action, potentially driving additional volatility.

Source: ACTIONFOREX