EUR/USD Forecast: Easter is over, and so is the recovery
|- EUR/USD is leaning lower, retreating from a recovery attempt.
- While Easter is over, the economic calendar remains light.
- The technical picture is bearish for the pair.
EUR/USD is trading around 1.1250, down from an attempt to get closer to 1.1300. A calm holiday atmosphere helped the pair rise. When nothing happens, the euro zone's trade surplus boosts the common currency.
But now, all markets are back to full swing and the reality of a sluggish euro-zone economy has not changed. Just before Easter, Marki's Manufacturing PMI for Germany printed 44.5 points, deep in contraction territory.
The divergence is also seen in bond yields, with the US-German 10-year bonds reaching a four-month high.
Recent data in the US has not been much better. Existing Home Sales dropped to an annualized level of 5.21 million in March, down from 5.48 million in February. Building Permits and Housing Starts, published on Good Friday, both missed expectations.
Another housing figure is due today: New Home Sales. In the old continent, Eurostat's Consumer Confidence measure is projected to show ongoing pessimism.
Markets remain calm amid a light calendar, but one financial asset is on the move. Oil prices are rising after the US announced it ends the waiver on buying Iranian oil next week. The statement from US Secretary of State Mike Pompeo pushed prices higher. There is usually a negative correlation between oil prices and the US Dollar. So far, it has yet to materialize.
All in all, the better US economy gives the greenback an advantage.
EUR/USD Technical Analysis
EUR/USD is leaning lower, trading below the 50 and 200 Simple Moving Averages. Momentum is to the downside and the Relative Strength Index on the four-hour chart is leaning lower as well.
Support awaits at 1.1225 which was a low point during the holiday trading. 1.1205 was a swing low in early April, and 1.1176 was the 2019 low.
Resistance is at 1.1265 which was the high point during Easter. 1.1280 provided support last week and now serves as resistance. The next level to watch is 1.1325 that held the pair down twice earlier this month.
More: EUR/USD gains may run into a wall – Confluence Detector
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