EUR/USD Forecast: poised to extend the ongoing upward trajectory
|Despite of yesterday's corrective move, the EUR/USD pair managed to defend the 1.0700 handle and regained traction on Thursday. The pair prolonged its recovery move from the very important year-to-date ascending trend-line support and touched a fresh three-week high near mid-1.0700s. The up-move, however, lacked momentum as investors remained cautious ahead of the crucial French elections on Sunday and hence, seemed reluctant from adding any further bullish bets.
Meanwhile, resumption of the selling mood around the greenback, with the key US Dollar Index failing to build on yesterday's tepid recovery move from multi-week lows, remains supportive of the bid tone surrounding the major.
On the economic data front, the disappointing release of German PPI print for March provided little impetus. From the US, traders will confront the release of weekly jobless claims and Philly Fed Manufacturing Index, which would be looked upon for some trading impetus later during the NA session. In the meantime, political news would continue to be a key determinant of the pair's movement during European session.
Technically, the pair has confirmed a break through a short-term ascending trend-channel formation on 4-hourly chart and is currently trading marginally above 50% Fibonacci retracement level of 1.0905-1.0570 downslide. Hence, from current levels the pair seems poised to extend the upward trajectory towards 61.8% Fibonacci retracement level resistance near 1.0775 region.
With short-term indicators heading into overbought territory, this 1.0775 resistance could possibly cap further upside. However, should the pair manage to decisively break through this important hurdle, the upward trajectory is likely to get extended further beyond the 1.0800 handle towards retesting the very important 200-day SMA hurdle near 1.0845-50 region.
On the flip side, the ascending trend-channel break-point, currently near 1.0715 level, closely followed by the 1.0700 handle (38.2% Fibonacci retracement level), seems to protect immediate downside. On a sustained weakness back below the 1.0700 handle could drag the pair back towards 23.6% Fibonacci retracement level support near mid-1.0600s, en-route 100-day SMA and the medium-term ascending trend-line support near 1.0630-20 band.
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