EUR/USD extends ECB-inspired rally to mid-1.0500s



EUR/USD has extended its daily rally and reached its highest level in nearly a week above 1.0550. Hawkish comments from ECB policymaker Klaas Knot and the broad-based dollar weakness in the risk-positive environment continue to fuel the pair's upside as focus shifts to US data.

 The Relative Strength Index (RSI) indicator on the four-hour chart stays below 70 while holding above 50, suggesting that the pair has more room on the upside before turning technically overbought. 

On the upside, 1.0480 (50-period SMA, Fibonacci 50% retracement of the latest decline) aligns as initial resistance. In case this level turns into support, 1.0500 (psychological level, Fibonacci 61.8% retracement) and 1.0530 (100-period SMA) could be seen as the next recovery targets.

Supports are located at 1.0450 (Fibonacci 38.2% retracement), 1.0420 (Fibonacci 23.6% retracement) and 1.0400 (psychological level).

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