EUR/USD Forecast: Buyers manage to keep Euro above key support
|- EUR/USD has regained its traction and climbed above 1.1000 mid-week.
- Buyers continue to defend the 100-period SMA on the four-hour chart.
- A risk rally in Wall Street could help the pair stretch higher.
After having lost more than 70 pips on Tuesday, EUR/USD has regained its traction and climbed above 1.1000 early Wednesday. Rising US stock index futures point to a positive opening in Wall Street, which could put additional weight on the US Dollar's (USD) shoulders and help the pair keep its footing in the second half of the day.
The risk-averse market environment allowed the USD to find demand as a safe haven and to outperform its rivals on Tuesday. With Microsoft and Google Alphabet reporting better-than-expected earnings for the first quarter after the closing bell, however, the USD lost its strength during the Asian trading hours. In the early European morning, Nasdaq Futures are up more than 1%, reflecting the improving risk mood.
In the early American session, the US Census Bureau will release the Durable Goods Orders data for March, which is forecast to print a monthly increase of 0.8% following February's 1% contraction. In case there is an unexpected decrease in that data, the USD could come under renewed selling pressure. On the other hand, a positive print is unlikely to help the USD regather its strength unless it's accompanied by a negative opening in Wall Street.
Having said that, investors could still opt to wait for the first quarter Gross Domestic Product (GDP) data on Thursday before deciding the USD's next short term direction and force EUR/USD to stay in its weekly trading range.
EUR/USD Technical Analysis
The 100-period Simple Moving Average on the four-hour chart at 1.0960 stays intact following Tuesday's pullback, highlighting buyers' willingness to continue to defend this level. The Fibonacci 23.6% retracement level of the latest uptrend is also located slightly below that level at 1.0950 to reinforce that support. Additionally, the Relative Strength Index (RSI) indicator recovered back above 50, confirming the bullish tilt in the short-term outlook.
On the upside, 1.1050 (static level) could be seen as the next bullish target before 1.1075 (end-point of the latest uptrend) and 1.1100 (psychological level).
1.1000 (psychological level, static level) aligns as interim support before 1.0960/50. A four-hour close below the latter could cause technical sellers to come into play and drag the pair lower toward 1.0900.
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