EUR/USD Forecast: After failing to rise on good news, is it ready to fall?

EUR/USD is trading around 1.1330 once again after it topped 1.1370 late on Wednesday. It fails to gain despite two positive developments.

The FOMC Meeting Minutes confirmed the dovish twist by the world's most powerful central bank. The Fed is set to keep rates on hold for quite a while given external uncertainties. Moreover, the Federal Reserve is keen on ending the balance sheet reduction program relatively soon. The news sent stocks up and the US Dollar down, but not for long.

The Flash euro-zone purchasing managers' indices came out mostly above expectations, showing tentative signs of a rebound. Markit's forward-looking survey for the German manufacturing sector showed a worsening picture once again, but France saw improvements in both sectors and Germany enjoyed a bump up in the services sector.

When a currency pair cannot rise on good news, it exposes its weakness. 

Taking stock on talks

Trade talks continue in Washington. According to reports, the US and China are working on six memorandums of understanding on various topics. Chinese Premier Liu He may meet President Donald Trump on Friday. A meeting between Trump and his counterpart Xi Jinping is currently not on the cards.

And while the US is getting closer to China on trade, there is no progress with the EU. Austrian Chancellor Sebastian Kurz left a meeting with Trump at the White House saying that "relations have seen better days." The US is considering slapping new tariffs on EU car imports later this year. 

Brexit negotiations also continue with the EU and the UK going in circles around the Irish Backstop issue. There are 36 days left until the UK leaves the EU and a hard Brexit is becoming more real every day.

A busy calendar

Later today, the US publishes durable goods orders for December. The belated report feeds into the all-important GDP figure next week. Increases are expected.

See: US Durable Goods Preview: Shutdown reporting vs. the trend

Also, the Philly Fed Index, weekly jobless claims, Markit's flash PMIs, and existing home sales will all be of interest. 

See: Existing Home Sales Preview: Revived by falling rates?

EUR/USD Technical analysis

EUR/USD still trades above the 50 Simple Moving Average on the four-hour chart, but Momentum is waning, and the Relative Strength Index is turning down. It is a bit of a mixed picture.

Support awaits at 1.1320 which was a low point earlier. 1.1295 provided some support early in the week, and 1.1275 is already more significant: it is the weekly low. Further down, 1.1250 is a double bottom, and the 2019 low of 1.1235 is next down the line.

1.1335 capped the pair on Monday and is followed by 1.1372, the peak seen on Wednesday. 1.1390 and 1.1405 supported EUR/USD  back in January and serve as resistance lines now.