- US fiscal stimulus progress and Fed Chair Powell's congressional testimony will likely cap the greenback's potential upside.
- EUR/USD looking to extend recent gains as price consolidates below key resistance.
The dollar is turning back lower after a bit of an advance earlier. Looking at EUR/USD, price is back to little changed around 1.214 as the dollar takes a breather from gains despite US ten-year Treasury yields climbing toward 1.40%.
From a technical perspective, the euro looks set to extend its rebound higher against the US dollar as the price consolidates within the resistance of the Descending Channel. With the exchange rate tracking above all six moving averages and the RSI nudging back above its neutral midpoint, the path of least resistance seems higher.
A daily close above the February high (1.2169) would likely neutralize near-term selling pressure and open the door for buyers to probe psychological resistance at 1.2200. Clearing that barrier brings the yearly high set on January 6 (1.2349) into focus.
However, failing to breach the Descending Channel resistance may allow sellers to drive the exchange rate back towards the support area at 1.2055 – 1.2075.
