EUR/USD Analysis: boosted by sentiment, 1.1160 next
|EUR/USD Current Price: 1.1075
- Brexit and trade-war optimism continue to underpin the shared currency.
- European inflation confirmed at 0.8% YoY in September, core inflation at 1.0%.
- EUR/USD bullish momentum set to continue with the pair heading to 1.1160.
The EUR/USD pair has surged to a fresh multi-week high of 1.1085, as dismal US data coupled with renewed market’s optimism. Without much official confirmation, market talks focused on Brexit suggesting, the DUP would agree with a newer way to deal with the Irish border issue. In the trade war front, US President Trump said that a trade deal with China was being papered, although it won’t be signed until he meets again with Chinese President Xi in Chile.
The EU released its August Trade Balance, which seasonally adjusted, posted a surplus of €20.3B, better than the €18.9B anticipated. September inflation was confirmed at 0.8% YoY, below the expected 0.9%, while the core annual CPI met the market’s expectations by printing 1.0%. In the US, Retail Sales unexpectedly fell in September by 0.3%, the first decline in seven months.
This Thursday, the macroeconomic calendar will be light in the EU, as the Union will only release August Construction Output. The US, on the other hand, will publish September, Building Permits and Housing Starts, the Philly Fed Manufacturing Survey, Capacity Utilization and Industrial Production, and the usual weekly unemployment figures.
EUR/USD short-term technical outlook
The EUR/USD pair has retreated modestly from the mentioned high, now trading in the 1.1060 price zone. The pair is technically bullish, as it rallied well above its 20 SMA in the 4 hours chart, after finding buyers around it. The moving average is well above the larger ones, which continue lacking directional strength. Technical indicators, in the meantime, have reached overbought levels, where they lost strength upward, pulling back just modestly. Renewed buying interest that pushes the pair beyond the mentioned daily high could result in a test of the next mid-term relevant resistance at 1.1160.
Support levels: 1.1045 1.1000 1.0960
Resistance levels: 1.1085 1.1120 1.1160
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