EUR/USD Forecast: higher in range but still lacking definitions
|- EUR lower in European hours, dragged by poor UK data.
- Fed's speakers and equities to lead the way in the American afternoon.
As usual these days, the EUR/USD pair advanced in Asia to turn negative after London's opening, now trading around 1.2370 after flirting with 1.2400. There was no particular catalyst for the 50 pips' slump, but once again, poor UK data helped to drag its European counterparts lower. The EU released its February current account, which showed a surplus of €35.1 billion, beating expectations but below a previous revised €39.0B. In the meantime, European indexes hover around their opening levels, but government bond yields are sharply up, with the US 10-year note touching 2.90% adding 5 basis points in pre-opening trading, limiting dollar's strength.
Despite the positive momentum of the common currency has lost steam, the dollar remains out of the market's favor, mostly due to the uncertainty generated by the Trump´s administration regarding its foreign policies. A couple of Fed's speakers will hit the wires today, while the macroeconomic calendar will also bring the usual weekly unemployment claims figures and the Philly Fed Manufacturing Survey.
The pair continues trading within familiar levels, and behavior this week shows that the 1.2400 area is a tough bone to break, not because of selling interest around it, but because of bulls taking profits out of the table on approaches to the level, unwilling to push it higher after latest softer-than-expected EU data. Also capping advances is the long-term descendant trend line coming from this year high set last February, acting as a psychological barrier and currently at around 1.2410/20.
The 4 hours chart shows that the price is struggling around a bullish 20 SMA, while technical indicators turned lower, the Momentum entering bearish territory and the RSI around 51, both in neutral territory and therefore falling short of confirming a downward extension ahead. The 1.2330 region is the immediate support, followed by 1.2290. Should this last give up, the 1.2250 region comes at sigh. To the upside, the mentioned 1.2410/20 price zone is the immediate resistance, with gains beyond it aiming to the 1.2445 level.
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