EUR/USD Forecast: Bulls keep adding longs despite the risk-off mood
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFEREUR/USD Current Price: 1.0732
- The S&P Global PMIs hinted at an economic slowdown in Europe and the US.
- ECB officials keep paving the way for a 50 bps rate hike in July.
- EUR/USD is overbought in the near term but has room to extend its gains.
The EUR/USD pair trades near a fresh weekly high of 1.0748, underpinned by comments from the European Central Bank officials. Following President Christine Lagarde’s words hinting at a rate hike as soon as July, other ECB members such as Martin Kazaks and Robert Holzmann vowed a 50 bps hike in July. The central bank would be ending almost a decade of negative rates.
The shared currency rose despite tepid local data. S&P Global released the preliminary estimates of its May PMIs, which showed that most European indexes came in below the market’s expectations, except for the German ones, which were slightly better than the April ones. The EU services PMI came down to 56.3 from 57.7 in the previous month, while the manufacturing index printed at 54.4, below the 54.9 expected. The US S&P Global Manufacturing PMI slid to 57.5 as expected, while the services index contracted to 53.5 in the same period.
The US also released April New Home Sales, which plunged by 16.6% and the Richmond Fed Manufacturing Index, down to -9 in May from 14 in April. On Wednesday, the country will publish April Durable Goods Orders, foreseen up by a modest 0.6%. Several central banks’ leaders will hit the wires amid their appearances at the Davos Economic Forum.
EUR/USD short-term technical outlook
From a technical point of view, the EUR/USD pair is bullish. The pair has bounced from around the 38.2% retracement of its latest daily decline at 1.0670, with the next Fibonacci resistance located at 1.0770. The daily chart shows that the pair advanced further above a flat 20 SMA, which now converges with a Fibonacci support level at 1.0545, while the longer ones maintain their bearish slopes far above the current level. The Momentum indicator eases within positive levels, but the RSI indicator keeps grinding higher, now at around 56.
The near-term picture backs a continued advance, as in the 4-hour chart, the pair is well above all of its moving averages, with the 20 SMA heading firmly north just below the 200 SMA. Technical indicators, in the meantime, head mildly higher in extreme overbought readings, without signs of bullish exhaustion.
Support levels: 1.710 1.0670 1.0615
Resistance levels: 1.0770 1.0810 1.0855
EUR/USD Current Price: 1.0732
- The S&P Global PMIs hinted at an economic slowdown in Europe and the US.
- ECB officials keep paving the way for a 50 bps rate hike in July.
- EUR/USD is overbought in the near term but has room to extend its gains.
The EUR/USD pair trades near a fresh weekly high of 1.0748, underpinned by comments from the European Central Bank officials. Following President Christine Lagarde’s words hinting at a rate hike as soon as July, other ECB members such as Martin Kazaks and Robert Holzmann vowed a 50 bps hike in July. The central bank would be ending almost a decade of negative rates.
The shared currency rose despite tepid local data. S&P Global released the preliminary estimates of its May PMIs, which showed that most European indexes came in below the market’s expectations, except for the German ones, which were slightly better than the April ones. The EU services PMI came down to 56.3 from 57.7 in the previous month, while the manufacturing index printed at 54.4, below the 54.9 expected. The US S&P Global Manufacturing PMI slid to 57.5 as expected, while the services index contracted to 53.5 in the same period.
The US also released April New Home Sales, which plunged by 16.6% and the Richmond Fed Manufacturing Index, down to -9 in May from 14 in April. On Wednesday, the country will publish April Durable Goods Orders, foreseen up by a modest 0.6%. Several central banks’ leaders will hit the wires amid their appearances at the Davos Economic Forum.
EUR/USD short-term technical outlook
From a technical point of view, the EUR/USD pair is bullish. The pair has bounced from around the 38.2% retracement of its latest daily decline at 1.0670, with the next Fibonacci resistance located at 1.0770. The daily chart shows that the pair advanced further above a flat 20 SMA, which now converges with a Fibonacci support level at 1.0545, while the longer ones maintain their bearish slopes far above the current level. The Momentum indicator eases within positive levels, but the RSI indicator keeps grinding higher, now at around 56.
The near-term picture backs a continued advance, as in the 4-hour chart, the pair is well above all of its moving averages, with the 20 SMA heading firmly north just below the 200 SMA. Technical indicators, in the meantime, head mildly higher in extreme overbought readings, without signs of bullish exhaustion.
Support levels: 1.710 1.0670 1.0615
Resistance levels: 1.0770 1.0810 1.0855
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.