Bullish view
- Set a buy-stop at 1.1095 and a take-profit at 1.1150.
- Add a stop-loss at 1.0980.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 1.1015 and a take-profit at 1.0960.
- Add a stop-loss at 1.1095.
The EUR/USD pair jumped to the highest point since March 2022 as concerns about the banking sector continued. It also rose as the euro reacted to the upbeat German GDP forecasts for the year. The pair was trading at 1.1033 ahead of the upcoming US GDP numbers and European confidence data.
Banking concerns remain
The main catalyst for the EUR/USD pair and the broader market is the rising fear about First Republic Bank, which has emerged as one of the riskiest companies in the US. On Tuesday, the shares plunged by more than 40%. And on Wednesday, it fell by more than 20%, pushing it to the lowest level on record.
First Republic has lost more than $100 billion of deposits this year as concerns about the company continued. With its shares plunging, there is an increased risk that the company’s depositors will continue pulling money from their accounts. As a result, analysts believe that the firm could move in the same direction as Silicon Valley Bank and Signature.
The EUR/USD was also a bit volatile after Germany boosted its economic forecast for the year. In a statement, the country’s economy minister said that the country will expand by 0.4% this year, higher than the previous 0.2%. He cited the relatively stable energy costs as natural gas prices retreated. He hopes that the country’s inflation will slow down in the coming months.
Meanwhile, the US published strong economic numbers on Wednesday. Durable goods orders rose for the first time in three months. They jumped by 3.2% in March from the previous month. New orders for defence and non-defense aircrafts also jumped.
The next EUR/USD news will be the upcoming US GDP numbers. Being the first estimates, the numbers will have an impact on the pair.
EUR/USD technical analysis
The EUR/USD pair rose to a high of 1.1095 and then quickly pulled back to a low of 1.1032. On the 4H chart, the pair then formed a shooting star pattern, which is usually a bearish sign. It remains slightly above the 50-period moving average. The current price is important because it was the highest point on February 2.
Therefore, broadly, the outlook of the pair is still bullish but traders will need to move above the upper side of the shooting star pattern. If this happens, the next key level to watch will be at 1.1150.
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