EUR/USD Forecast: Positive momentum to accelerate further on a sustained move beyond 1.1315-20 area
|After previous session's modest pullback, the EUR/USD pair regained positive traction and climbed further beyond the 1.1300 mark, or near three-week lows on Friday. The shared currency left behind the ECB's fresh dovish tilt earlier in the week and was being supported by some renewed selling around the US Dollar, which fell to its lowest level since March 28. The greenback remained depressed and recorded its first weekly loss since the week ending March 12 after comments by several FOMC members reaffirmed the central bank’s ‘patience’ on interest rates. On the economic data front, UoM US consumer sentiment index fell short of market expectations and did little to provide any immediate respite to the USD bulls.
The buck held on the defensive at the start of a new trading week and was further pressurized by renewed US-China trade optimism, especially after report noting that the US negotiators have softened their stance on China's industrial subsidies in an attempt to reach a trade deal. The pair held marginally above the 1.1300 handle during the Asian session, though lacked any strong follow-through amid absent relevant market moving economic releases from the Euro-zone. The US economic docket features the second-tier release of Empire State Manufacturing Index, which coupled with scheduled appearances by the Chicago Fed President Charles Evans, might contribute towards producing some short-term trading opportunities.
Despite the supporting factors, the pair now seemed struggling to find acceptance above an important confluence resistance - comprising of a short-term ascending trend-channel resistance and 50% Fibonacci retracement level of the 1.1448-1.1184 recent slide. The mentioned barrier, around the 1.1315-20 region might now act as a key pivotal point for the pair's next leg of a near-term directional move. A sustained move beyond is likely to accelerate the up-move towards 61.8% Fibo. level, around mid-1.1300s, before the pair eventually aims to reclaim the 1.1400 round figure mark.
Alternatively, a rejection slide from current resistance zone, leading to a subsequent break through the 1.1300 handle and 38.2% Fibo. level support around the 1.1285 region is likely to accelerate the fall towards challenging the trend-channel support, currently near mid-1.1200s. A follow-through selling would invalidate the bullish channel and turn the pair vulnerable to resume with its prior/well-established bearish trend.
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