EUR/USD Forecast: back to highs, despite easing risk sentiment
|Risk aversion may have eased, but the dollar is still in trouble, trading at multi-week lows against most of its major rivals. The EUR/USD pair recovered from Thursday's low of 1.1075, reached late US session on some rumors pointing that US President Trump would avoid impeachment, as Comey was supposed to have said that there was no obstruction of justice in the Flynn-Russia case. The news remains unconfirmed, and talks are that it was fake, but it was enough to halt stocks' decline and push the greenback higher.
Equities retain the positive tone, but across the FX board, USD selling resumed, with the EUR/USD pair nearing its yearly high of 1.1171, helped by strong German data. Producer prices surged in the EU largest economy, up in April by 0.4%, against expectations of 0.2%. The annual figure came in at 3.4%, beating expectations of 3.2%. Also, the EU current account recorded a surplus of €34.1 billion in March, below previous but better than forecast.
The bullish stance is clear intraday as in the 4 hours chart, technical indicators resumed their advances after correcting extreme overbought readings. The Momentum is bouncing strongly from its 100 level, whilst the RSI indicator is heading north around 71. In the same chart, a bullish 20 SMA contained declines, now around 1.1105.
Above the mentioned high, the pair has scope to advance up to 1.1210, en route to 1.1260, a major long term resistance, while dips towards the 1.1080/1.1100 region will likely attract buying interest.
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