EUR/USD Forecast: Timid buying interest reappears after US GDP figures
|EUR/USD Current price: 1.0818
- The Q4 United States Gross Domestic Product suffered a minor revision to 3.2%.
- Financial markets remain cautious as investors speculate about the Federal Reserve’s next move.
- EUR/USD bounced from around 1.0800, buyers need additional signs.
The EUR/USD pair posted an intraday low of 1.0796, as the US Dollar gathered momentum early in the European session on the back of a souring market mood. Following a mildly positive Wall Street close, Asian and European indexes edged lower, reflecting an increased demand for safety.
Concerns rotate around the United States (US) Federal Reserve (Fed), as mounting inflationary pressures suggest the central bank will maintain interest rates higher for longer, which in turn would increase the risk of a steeper economic setback.
Data-wise, the Eurozone published February´s Consumer Confidence as estimated by the European Commission. The leading indicator printed at -15.5, matching January’s reading and the market expectations. Across the pond, the United States released a revision of the Q4 Gross Domestic Gross Domestic Product (GDP), which was reported at 3.2%, slightly below the 3.3% expected and previously calculated. Additionally, the January Goods Trade Balance posted a deficit of $90.1 billion, worsening from $-89.1 in December.
EUR/USD short-term technical outlook
The EUR/USD pair traded between Fibonacci levels throughout the first half of the day. Sellers rejected advances around the 38.2% retracement of the 1.1139-1.0694 daily slide at 1.0865, while buyers defended the downside around the 23.6% retracement at 1.0799.
Following the release of US data, the daily chart for the EUR/USD pair shows it holds between Fibo levels but also that the positive momentum continues to recede. Technical indicators extended their slides within positive levels, reflecting decreased buying interest rather than fresh selling impetus. At the same time, the pair seesaws around a mildly bullish 100 Simple Moving Average (SMA) while it develops a handful of pips below a flat 200 SMA. Finally, the 20 SMA is also directionless at around 1.0795.
For the nearer term, the 4-hour chart shows the pair remains below its 20 and 200 SMAs while above a flat 100 SMA. At the same time, technical indicators bounced from their intraday lows but hold within negative levels, reflecting cautious buying interest. EUR/USD needs to clear the static 1.0865 resistance level to resume its advance.
Support levels: 1.0795 1.0750 1.0700
Resistance levels: 1.0865 1.0910 1.0950
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