EUR/USD Forecast: bullish, beware of strong resistance at 1.0770
|The greenback is under strong selling pressure this Monday, extending the negative momentum triggered by Donald Trump's inaugural speech. The absence of clear comments regarding taxes or investment measures, alongside with strong protectionism wording, are behind this dollar's decline. The macroeconomic calendar will remain light this Monday, with the most relevant release being the EU consumer confidence for January later on the day.
The EUR/USD pair trades at levels last seen early December, around 1.0730, retreating modestly from a daily high of 1.0754, and holding on to a bullish stance after breaking through 1.0710, the 38.2% retracement of the latest monthly slide, now the immediate support. In the 4 hours chart, technical indicators are turning slightly lower within positive territory, rather indicating a lack of momentum than suggesting the pair may change course, whilst the 20 SMA has extended its advance below the current level, maintaining a clear upward slope.
The 100 DMA stands around 1.0770, and gains beyond it should favor an extension towards 1.0820/40, where the pair has the 50% retracement of the mentioned decline and the base of the 2015-2016 range. Such advance seems unlikely today with a lackluster macroeconomic calendar, but as long as above 1.0710, the target is clear.
A break below 1.0710 on the other hand, can see the pair correcting lower towards the 1.0650/60 region, where buying interest will likely re-appear.
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