EUR/USD Forecast: Bulls retake control, face resistance at 1.0700
|EUR/USD Current Price: 1.0659
- The lack of US Federal Reserve clues took its toll on the US Dollar.
- Tepid Euro Zone data was not enough to interrupt the Euro’s recovery.
- EUR/USD turned bullish in the near term, sellers await around 1.0700.
The EUR/USD pair resumed its advance on Thursday, trading in the 1.0650 price zone ahead of the United States (US) opening. The US Dollar lost ground after the US Federal Reserve (Fed) decided to keep rates on hold for a second consecutive meeting while giving no clear hints about what’s next on monetary policy. Chairman Jerome Powell avoided clarifying whether the central bank is done with monetary tightening.
The Euro surged regardless of disappointing local data. S&P Global released the final versions of the October Manufacturing PMIs, which confirmed a substantial slump in the manufacturing sector at the beginning of the fourth quarter. Nevertheless, the German index was upwardly revised from 40.7 to 40.8, while the final Euro Zone figure was confirmed at 43.1 from the 43.0 previously estimated.
Across the pond, the Challenger Job Cuts report showed US-based employers announced 36,836 cuts in October, decreasing from the 47,457 cuts announced one month prior. Additionally, the country released Initial Jobless Claims for the week ended October 27, up by 217K, worse than anticipated. The preliminary estimate of the Q3 Nonfarm Productivity posted 4.7%, beating expectations of a 4.2% advance, while Unit Labor Costs in the same period unexpectedly contracted by 0.8%. The country will later publish September Factory Orders, foreseen at 2.3% from 1.2% in the previous month.
EUR/USD short-term technical outlook
From a technical point of view, the daily chart for the EUR/USD pair is set to extend its gains. Technical indicators head north almost vertically, well into positive territory. At the same time, EUR/USD met buyers on a brief dip below a bullish 20 Simple Moving Average (SMA), now trading far above it.
Technical readings in the 4-hour chart also support a bullish continuation, as the pair gained momentum above all its moving averages, resulting in the 20 SMA turning north above the longer ones. Finally, indicators head sharply higher, approaching overbought readings and reflecting increased buying interest.
Support levels: 1.0620 1.0575 1.0520
Resistance levels: 1.0700 1.0745 1.0790
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