EUR/USD Forecast: Remains vulnerable near 2-week lows amid holiday-thinned trading
|The EUR/USD pair edged higher in relatively quiet trading on Friday and recovered a part of the previous session's slump to near two-week lows, triggered by disappointing German/Euro-zone manufacturing PMI numbers. The uptick, however, lacked any strong bullish conviction amid resurfacing growth concerns in the Euro area, though remained supported by a slight disappointment from the US housing market data. In fact, housing starts for the month of March fell 0.3% to an annualized rate of 1.139 million while building permits fell 1.7% to 1.269 million annualized rate.
The pair finally settled with modest daily gains and now seems to have stabilized just below mid-1.1200s. The pair oscillated in a narrow trading band through the Asian session on Monday and with most major European markets closed in observance of Easter Monday, the trading activity is expected to remain subdued. Later during the early North-American session, the only release of existing home sales data from the US will be looked upon for some short-term trading opportunities.
Looking at the technical picture, the pair last week finally confirmed a near-term bearish breakthrough a short-term ascending trend-channel and hence, remains vulnerable to aim back towards challenging the 1.1200 round figure mark en-route YTD lows, around the 1.1175 region. The latter nears a support marked by 61.8% Fibonacci retracement level of the 1.0341-1.2510 up-move and should act as a key pivotal point for the pair's next leg of a directional move.
On the flip side, any subsequent recovery attempts might now confront some fresh supply near the 1.1275-80 region and seem more likely to remain capped near the trend-channel support break-point, currently near the 1.1300 round figure mark. Given the recent repeated failures to sustain at higher levels, bullish acceptance above the 1.1300 handle would negate the near-term bearish bias and prompt some aggressive short-covering move.
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