EUR/USD Forecast: At the upper end of the range ahead of ECB
|EUR/USD Current Price: 1.0874
- US Federal Reserve pledged to do whatever it takes to keep the economy afloat through the pandemic.
- Gilead reported that remdesivir met the main goal in a clinical trial, boosting optimism.
- EUR/USD advanced alongside equities, remains within familiar levels below 1.0900.
The FX board showed quite a disappointing behaviour to US headlines, with the EUR/USD ending the day with modest gains. The pair attempted to advance during the European session, but stalled at 1.0873, below its previous weekly high. The pair failed to advance, despite encouraging data coming from Germany, as the preliminary estimate of April inflation beat expectations, up by 0.8% YoY. The US, on the other hand, released the preliminary estimate of Q1 GDP came in worse than expected, as the economy contracted by 4.8% in the three months to March. The previous quarter reading was upwardly revised to 2.1%.
Alongside Q1 GDP release, Gilead, a pharmacological company, announced that its experimental drug, remdesivir, met the main goal in a clinical trial, boosting hopes and equities. Data collected so far seems promising in curing COVID-19, although further testing was needed. Finally, it was the Fed’s turn. The US central bank acknowledged that “the ongoing public health crisis will weigh heavily on economic activity, employment, and inflation”, and poses “considerable risks to the economic outlook over the medium term." Policymakers said they would use its full range of tools to help the economy facing considerable risk from the coronavirus pandemic. Fed’s pledge to do “whatever it takes,” to preserve the economy and set the stage for the recovery.
This Friday, Germany will publish March Retail Sales, seen down by 7.3% monthly basis. The EU will publish the preliminary estimate of its Q1 GDP seen down by 3.5%, while the ECB is having a monetary policy meeting. Finally, the US will unveil weekly jobless claims, seen at 3500K.
EUR/USD short-term technical outlook
The EUR/USD pair is trading near the post-Fed’s peak at 1.0885, holding on to a neutral-to-bullish stance. The 4-hour chart shows that the pair continues to trade within moving averages, while technical indicators have posted a modest bounce from their midlines, lacking follow-through. Selling interest has been aligned just ahead of 1.0900 since last week, which means that stops could be building just above the mark.
Support levels: 1.0830 1.0790 1.0750
Resistance levels: 1.0900 1.0940 1.0985
View Live Chart for the EUR/USD
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