EUR/USD Forecast: move back above 1.2330 level to clear the way for bulls
|The US Dollar lost some more ground at the start of a new trading week and helped the EUR/USD pair to build on its post-NFP rebound from over 1-month lows. The pair gained positive traction for the second consecutive session and surged through the 1.2300 handle to test an important confluence support-turned-resistance, comprising of 50-day SMA and a short-term ascending trend-line.
Investors continue to watch trade-related headlines, with Chinese President Xi Jinping's comments soothing jitters over an escalating US-China trade dispute and prompted some USD buying during the Asian session on Tuesday. Xi promised to lower import tariffs on products, including cars and had a largely positive reaction in global financial markets.
The pair remained capped below the mentioned confluence resistance but has still managed to hold its neck above the 1.2300 handle. In absence of any major market moving economic data from the Euro-zone, traders might look forward to the release of US PPI print, scheduled later during the early NA session for some short-term opportunities. The focus, however, would be on Wednesday's consumer inflation figures and minutes of the last FOMC meeting, which will dominate this week's relatively lighter economic docket.
From a technical perspective, only a decisive breakthrough 50-day SMA barrier, currently near the 1.2330-35 region, would negate any near-term bearish bias and could assist the pair to extend the up-move. Momentum beyond the mentioned resistance is likely to accelerate the up-move and lift the pair back towards the 1.2400 handle en-route the next major supply zone near the 1.2445-50 region.
On the flip side, sustained weakness back below the 1.2300 handle might prompt some fresh selling and drag the pair back towards 1.2260-55 intermediate support. A follow-through weakness below 1.2235 level might now turn the pair vulnerable to finally aim towards testing a 3-month old trading range support near the 1.2180 region.
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