EUR/USD Forecast: Bulls hold the grip ahead of first-tier data
|EUR/USD Current Price: 1.1022
- The focus this week is on US growth and inflation updates.
- The German IFO survey showed Business Climate missed expectations in April.
- EUR/USD pressures daily highs above 1.1000, maintaining its positive bias.
The EUR/USD pair maintains a positive stance on Monday, trading around the 1.1000 figure. The US Dollar eased throughout the first half of the day, finding some demand ahead of Wall Street's opening. Still, major pairs remain within familiar ranges ahead of multiple first-tier events scheduled for this week. The United States (US) will publish the preliminary estimate of the Q1 Gross Domestic Product (GDP, which is expected to indicate an annualized pace of growth of 2%. Furthermore, the country will publish the Personal Consumption Expenditures Price Index for the first quarter and later in the week, the March index.
Growth and inflation are in the eye of the storm and among the main reasons for the current US Dollar's broad weakness. Fed's measures to tame skyrocketing inflation have taken their toll on economic progress, and speculation of a possible recession weight on the American currency. Should growth beat expectations and inflationary pressures ease further, the US Dollar has a chance of changing the trend.
Meanwhile, the macroeconomic calendar for today included the German IFO survey on Business Climate, which resulted in 93.6 in April, missing the market expectations. The assessment of the current situation was also worse than anticipated, while expectations improved by more than expected. As for the US, it released the March Chicago Fed National Activity Index, which declined to -0.19 against the -0.02 anticipated. The country will later publish the April Dallas Fed Manufacturing Business Index.
EUR/USD short-term technical outlook
The EUR/USD pair is up for a third consecutive day, although gains are modest. The daily chart shows the risk skews to the upside, although momentum is missing. The Relative Strength Index (RSI) indicator remains directionless at around 60, while the Momentum indicator aims lower just above its 100 level, reflecting limited buying interest. Nevertheless, the pair continues to develop above bullish moving averages, with the 20 Simple Moving Average (SMA) providing intraday support at around 1.0930.
In the near term, and according to the 4-hour chart, the pair offers a neutral-to-bullish stance. EUR/USD develops above its moving averages, but the 20 and 100 SMAs lack directional strength. At the same time, technical indicators head nowhere within positive levels, in line with the dominant positive bias.
Support levels: 1.0985 1.0930 1.0880
Resistance levels: 1.1060 1.1095 1.1140
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