EUR/USD Corrects Upwards as Market Sentiment Improves

EUR/USD has opened the new trading week on a positive note, showing some signs of recovery after last week's losses. The currency pair managed to erase a small portion of its previous week's losses, giving hope to buyers that it could extend its correction and rally further.

However, the previous week was not kind to the EUR/USD as the broad-based strength of the US Dollar amid risk aversion weighed heavily on the pair. As a result, the pair hit its lowest level in a month below 1.0850 on Friday, leaving many investors uncertain about its future direction.

Early on Monday, the Euro Stoxx 50 has been trading in positive territory, and US stock index futures have also risen between 0.25% and 0.35%. This reflects a more optimistic market sentiment, which could be a good sign for the EUR/USD as well.

As for the technical analysis, the next level to watch out for is the area between the 50% and 61.8% Fibonacci retracement levels, where the price may experience a pullback. The area of 1.09000 is where the 61.8% Fibonacci level is placed, making it one of the most important levels to watch out for.

In conclusion, the EUR/USD is showing some promising signs of recovery after last week's losses. However, the broader market sentiment and technical indicators suggest that there could be some resistance ahead before the pair can gain any significant momentum.

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During the European morning, the EUR/USD pair remains below 1.0900 due to weak risk sentiment, which has led to an increase in the value of the US Dollar against other currencies. Traders are keeping an eye out for upcoming Eurozone GDP and US Retail Sales data ahead of US debt ceiling talks. It's worth noting that a possible pullback could occur in the downside area at the 61.8% level.

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Price had a reaction on the 50% / 61.8% FIBO as predicted.

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