On Tuesday, the euro chose not to continue resisting market sentiment and joined the broader risk-on trend. The U.S. stock index S&P 500 rose by 0.72%, the dollar index declined by 0.76%, and the euro appreciated by 0.88% (99 pips). The euro was also bolstered by positive ZEW economic sentiment data, which rose from -18.5 in April to 11.6 in May.
On the daily chart, the price rebounded from the MACD line, broke above the 1.1110/50 range, and is approaching the target level of 1.1276. A breakout of this resistance would open the path to the next target at 1.1420. The Marlin oscillator has reversed to the upside.
On the four-hour chart, the Marlin oscillator has moved into bullish territory. The price is nearing the MACD line. A consolidation above this line (1.1214) would enable an attack on the 1.1276 resistance level (the July 2023 high).
It is unlikely that an alternative bearish scenario will develop. For it to unfold, the price would need to consolidate below the daily MACD line, under the 1.1100 level.
