EUR/USD Forecast: it's all about Trump these days

The EUR/USD pair is closing higher for a fourth consecutive week, and barely below its yearly high of 1.0828 posted last February, as  markets centered in unwinding the Trump trade this past week, dumping USD-related assets, and with Wall Street suffering its worst day since October last Wednesday. There were no big news to drive the FX market, with the most relevant figures being mixed housing data in the US, and European PMIs this Friday, indicating the that economic growth keeps advancing, at its fastest pace in over five years according to Markit preliminary numbers for March.

Ahead of the weekly close, speculative interest is waiting for political definitions coming from the US, with majors stuck in range, but also with  the dollar generally weak across the board. The US Congress is yet to vote on the Obamacare repeal bill proposed by President Trump, who is struggling to find support even within its own party. The bill has entered the Houses on Thursday, and is still unclear whether policy makers will reach an agreement this Friday or not. Despite the healthcare bill is not the most relevant for financial markets, but is seen as a test of the new US administration, as if Trump gets defeated, hopes for a tax reform or large infrastructure investment will continue to dilute, therefore implying lower US equities and USD.

Technically, the EUR/USD pair has advanced up to a major resistance area, printing 1.0824 before retreating modestly. Not only February monthly high stands at 1.0828, but at 1.0820, the pair has the 50% retracement of its post-US election slump. The pullback from the mentioned high has been quite shallow, as the pair held above the 1.0760 level, indicating that selling interest is quite limited.

In the weekly chart,  technical indicators keep advancing above their mid-lines, whilst the price is further above a still bearish 20 SMA. The 100 SMA in the mentioned chart stands at 1.1013, a possible bullish target should the pair continues advancing past the 1.0830 region. In the middle, the 61.8% retracement of the post-US election decline offers resistance at 1.0930.

In the daily chart, the Momentum indicator heads north at fresh monthly highs within overbought territory, whilst the RSI is horizontal around 62, reflecting the weekly range. Still the 20 DMA maintains its bullish slope above the 100 DMA, both well below the current level, supporting further advances.

The pair has a strong support around 1.0710, and it will take a break below it to confirm an interim top and favor a move lower towards 1.0635, while below this last, the next relevant support comes at  1.0565, although ongoing dollar's weakness makes unlikely a decline towards this last next week.

The FXStreet Forecast Poll, a measure of market's sentiment, indicates that the EUR/USD pair is gaining adepts, as 60% of experts are expecting an upward move, although not one  sees the pair reaching 1.1000. Sentiment suffers a drastic u-turn in the longer run, as only 22% favor the upside in the 1 and 3 months views, while bears account for 50% and 67% respectively. Despite ongoing dollar's weakness, seems speculative interest is unwilling to fully give up on the USD.

Bears dominate the GBP/USD pair after it was unable to break above 1.2500 these days, but mostly due to the upcoming Brexit, and its unknown implications. 80% of the polled experts expect a decline during the upcoming month, with 1.2227 being the average target. For the quarterly view, the pair is seen near 1.2100, with bulls being just 9% and bears 73%.

For the USD/JPY, bullish are still a majority, but the upward targets keep decreasing: for the three-month view, bulls account for the 65%, but the average target is now 113.99, down from previous week's 114.81. In the shorter term, the pair is seen neutral, holding below the critical resistance at 111.60, former yearly low, broken this week. 

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