EUR/USD Forecast: nearing major resistance around 1.2430
|- US housing data expected to have improved modestly in March.
- EUR/USD nearing the top of the symmetrical triangle that contains price since mid-February.
Dollar weakness continues dominating the FX board, with the EUR/USD pair up to 1.2413 so far today, now retreating modestly from the level, but holding around the 1.2400 figure. European indexes opened with a strong note, as geopolitical concerns have been put aside by Wall Street on Monday. There were no relevant news coming from the EU, although Italian inflation was a miss in March, growing below February's levels, somehow backing ECB's stance of maintaining QE.
Up next is the German ZEW survey, expected to show that business sentiment continued deteriorating in the country and the Union during April. Later in the day, the US will release Building Permits and Housing Start figures for March, both expected to show a modest improvement after the previous slumps. The US will also release Industrial Production and Capacity Utilization for March, with February readings having already been downwardly revised.
Overall, seems possible that the dollar will remain under pressure, but the positive mood coming from equities' markets may limit the advance of the high-yielding EUR.
Technically, the pair has been developing inside a symmetrical triangle since mid-February, confined to a well-defined range. The pair is approaching the top of the figure, which currently stands around 1.2430, and a break below the level could trigger an upward extension up to the 1.2480 region, where the pair topped last March. Short-term readings in the 4 hours chart support the bullish case, despite the limited momentum seen at the time being, as the pair is developing well above all of its moving averages, which slowly gain upward traction, while technical indicators pared their advances after reaching overbought levels, where they now stand. Supports from the current level come at 1.2370, and 1.2335.
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