EUR/USD Forecast: bulls getting courageous
|The EUR/USD pair trades steadily in the 1.1750 region, with activity well-limited across the board as investors are waiting for the key US inflation report. The Asian session was quiet in the data front, although local equities followed the lead of their overseas counterparts, down for the day and with high yielders reaching fresh weekly highs, where they stand ahead of the event. European indexes are also in the red, indicating that risk-averse trading is not over yet.
The release of German inflation figures for July passed unnoticed, as data matched markets' estimates and previous, with the CPI up 0.4% in the month, and steady at 1.7% yearly basis. For the US, inflation is expected at 0.2% in July from previous 0.0%, and up to 1.8% when compared to a year earlier from previous 1.6%. Such readings or above could help the greenback recover some ground against the yen, and advance against a weakened Pound, but the movement will likely be shallow against the common currency. A below-expected outcome, on the other hand, should result in the EUR/USD pair recovering the 1.1800 level.
Flat for a third consecutive day, the pair has managed to advance up to 1.1784 late Thursday, but quickly returned to the current comfort zone. The short term picture is modestly positive, as in the 4 hours chart, the price is a few pips above a bearish 20 SMA and a bullish 100 SMA, whilst the RSI stand pat within neutral territory, as the Momentum indicator bounces from its 100 level, supporting an advance although with limited strength at the time being.
Beyond 1.1785, the next resistance comes at 1.1820, and it will be above this last that bulls will get encouraged, probably pushing then the pair towards the 1.1850/60 region. A short term, immediate support stands at 1.1730, but it will take a break below 1.1690 to confirm a bearish extension, with 1.1650 and 1.1610 as the next intraday supports.
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