The EUR/USD pair advanced at the begging of the week extending Friday's gains as the U.S. dollar weakened across the board as investors await the Federal Reserve Chair's testimony before Congress and the nonfarm payrolls report.
At the time of writing, the EUR/USD pair is trading at the 1.0685 area, 0.5% above its opening price, having posted a two-week high of 1.0694 before retreating. At the same time, the dollar, measured by the DXY index, hovers around five-day lows at the 104.25 zone, 0.23% lower on the day.
The euro strengthened despite lower-than-expected data. In the Eurozone, the Sentix Investor Confidence index fell to -11.1 in March from its previous reading of -8. Separated data showed retail sales expanded 0.3% in February, way below the consensus of a 1% rise.
At the same time, lower U.S. Treasury yields weighed on the greenback as investors' attention turns to Federal Reserve Chair Jerome Powell's testimony before the U.S. Congress. The 10-year note offers 3.96%, while the 2- and 5-year bonds are yielding 4.87% and 4.25%, respectively. Meanwhile, Wall Street indexes traded slightly higher, reflecting the better market mood.
From a technical perspective, the EUR/USD pair holds a short-term neutral stance, with indicators on the daily chart around their midlines, while the price has advanced beyond the 20-day Simple Moving Average (SMA), improving the outlook.
On the upside, the immediate resistance level stands at the 1.0700 psychological mark and then the February monthly high of 1.0804. On the downside, supports line up at 1.0600, followed by 1.0580 and 1.0530 areas.
