Some of the leaders of the U.S. Federal Reserve believe that it is necessary to pause the monetary policy tightening cycle due to the risks of increasing pressure on the banking sector and the economy as a whole, which will ultimately lead to at least a recession. At the same time, the majority of the ECB's leadership believes that at the bank's May meeting, it is necessary to continue tightening monetary policy and raise the interest rate again by 50 basis points. Even based on this fundamental factor, it is obvious that one should buy the appreciating euro at the expense of the depreciating dollar.
EUR/USD continues to develop an upward trend and is trading near 1.1050 as of writing, approaching the key long-term resistance level 1.1090 (200 EMA on the weekly chart) and updating new highs since April 2022.
Below the key resistance level 1.1090, EUR/USD is still in the global downward trend zone, and only a breakout of the resistance level 1.1600 (200 EMA on the monthly chart) will move EUR/USD into the global bull market zone.
Alternatively, there will be a rebound near the 1.1090 resistance level, and the breakdown of the support levels 1.0970 (144 EMA on the weekly chart) and 1.0944 (200 EMA on the H1 chart) could signal the resumption of short positions with the prospect of a decline to support levels 1.0610 (200 EMA on the daily chart) and 1.0520 (local support level).
For now, long positions are preferable, despite the apparent overbought nature of the pair. The best entry into them would be a pullback to the support levels 1.1000 and 1.0970, with stops below the 1.0944 mark.
Support levels: 1.1032, 1.1000, 1.0970, 1.0944, 1.0822, 1.0800, 1.0790, 1.0700, 1.0610, 1.0520
Resistance levels: 1.1090, 1.1200, 1.1600
