EUR/USD Forecast: 1.1000 proves to be a tough resistance to crack
- EUR/USD holds steady near 1.0950 after Tuesday's rally.
- The pair's recent action highlighted the strength of 1.1000 resistance.
- The technical outlook for the short term remains bullish.
EUR/USD rose sharply but lost its bullish momentum after coming within a touching distance of 1.1000. The pair stays relatively quiet and fluctuates at around 1.0950 mid-week, while the technical outlook suggests that the bullish bias remains intact.
The renewed selling pressure surrounding the US Dollar (USD) triggered a rally in EUR/USD in the second half of the day on Tuesday. The positive opening in Wall Street, combined with retreating US Treasury bond yields, made it difficult for the USD to find demand despite the better-than-expected Housing Starts data.
Early Wednesday, soft inflation data from the UK revived expectations for a Bank of England rate cut in the first half of next year and caused Pound Sterling to suffer heavy losses against its rivals. Although the USD managed to capture some of the capital outflows, the Euro also attracted investors, with EUR/GBP rising to a fresh three-week high above 0.8650.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Pound Sterling.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.19% | 0.55% | -0.03% | -0.09% | -0.33% | -0.26% | 0.14% | |
| EUR | -0.20% | 0.35% | -0.22% | -0.29% | -0.53% | -0.46% | -0.06% | |
| GBP | -0.53% | -0.33% | -0.56% | -0.62% | -0.86% | -0.79% | -0.40% | |
| CAD | 0.03% | 0.22% | 0.57% | -0.07% | -0.30% | -0.24% | 0.15% | |
| AUD | 0.10% | 0.28% | 0.62% | 0.07% | -0.25% | -0.17% | 0.23% | |
| JPY | 0.33% | 0.53% | 0.85% | 0.30% | 0.24% | 0.07% | 0.46% | |
| NZD | 0.27% | 0.46% | 0.79% | 0.25% | 0.18% | -0.05% | 0.40% | |
| CHF | -0.11% | 0.06% | 0.39% | -0.16% | -0.23% | -0.49% | -0.40% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
In the second half of the day, Chicago Federal Reserve (Fed) President Austan Goolsbee is scheduled to deliver a speech. In an interview with Fox TV early Wednesday, Goolsbee said that the market has gotten ahead of itself on euphoria on likely interest rate cuts. Hence, markets are unlikely to show reaction in case he delivers similar remarks.
European Central Bank (ECB) Chief Economist Philip Lane is also expected to speak later in the day. At this point, it's clear that ECB policymakers don't want markets to think that there could be a rate cut before June next year.
EUR/USD Technical Analysis
EUR/USD continues to trade within the upper half of the ascending regression trend channel and the Relative Strength Index (RSI) indicator on the 4-hour chart holds comfortably above 50, suggesting that the bullish bias remains intact.
On the upside, 1.1000 (psychological level, static level) aligns as immediate resistance before 1.1050 (static level) and 1.1100 (upper limit of the ascending channel).
In case the pair makes a 4-hour close below 1.0940 (20-period Simple Moving Average, mid-point of the ascending channel), technical sellers could take action. In this scenario, 1.0900 (psychological level, static level) could be seen as next support before 1.0870 (100-period SMA, 50-period SMA).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
