EURUSD Technical Analysis

EURUSD traders today are focused on Italy-German yield spread and Powell testimony. Meanwhile, the 26 February EURUSD Technical Analysis discusses how the pair trades.

26 February, GKFX – Last week’s Fed and ECB minutes showed the monetary policy divergence is widening in the favor of the US dollar. Still, the downside in the EUR/USD was capped around 1.2260.

Rise in Italy-German Yield Differential EUR Impact

However, the resilience may not last long if the Italy-German 10-year bond yield spread starts widening ahead of the Italian elections (due on March. 4). It is believed that Neither the center-left, the center-right, or the populists are likely to command a majority in parliament. So the spread may widen in the EUR-negative manner, i.e. German yields could drop due to rise in safe-haven demand.

That said, all is not lost for the EUR/USD bulls as lack of new information on the path of interest rate hikes from Powell testimony (due later today) could yield another round of sell-off in the greenback. Kathy Lien from BK Asset Management believes Powell does not expect much in the ways of specifics from Powell outside of optimism and a vague plan to raise interest rates.

26 February EURUSD Technical Analysis

Shorter term, and according to the 4 hours chart, the risk remains skewed toward the downside as a selling interest surged around a bearish 20 SMA, which crossed below the larger ones, while technical indicators stand within a negative territory, with limited bearish strength.

Support levels: 1.2250 1.2205 1.2160

Resistance levels: 1.2340 1.2380 1.2425


This article 26 February EURUSD Technical Analysis was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

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