The EUR/USD pair extended gains on Wednesday, buoyed by better-than-expected Eurozone Retail Sales figures and a surging German trade surplus. These releases suggest resilient European demand, contrasting with recent weaker US data and supporting the Euro.
Germany’s January trade surplus exceeded forecasts, indicating strong demand for Euros from importers. Additionally, a recent survey highlights the Euro’s growing popularity among global central banks, fueled by positive yields and a brighter economic outlook.
Market attention now shifts to Fed Chair Powell’s testimony and the upcoming ECB policy meeting. Any hints of earlier-than-expected Fed rate cuts could weaken the USD, benefiting EUR/USD.
Technically, the pair’s short-term uptrend persists. EUR/USD faces resistance at its 50-day SMA (1.0859) and the February high (1.0888). A break above these levels opens the door to Fibonacci retracement targets at 1.0918 and 1.0972. However, a drop below 1.0795 could signal downside risk.
