EUR/USD Forecast: Battling to run beyond 1.1000

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0998

EU budget proposed by the European Commission will be worth €1.1 trillion.
US indexes at their highest in almost three months amid persistent optimism.
EUR/USD holding on to positive ground, but struggling to extend gains.

The shared currency jumped against its American rival to a fresh multi-week high of 1.1030, boosted by headlines indicating that the EU Commission is proposing a 750 billion euro recovery fund. Also, the next EU budget proposed by the European Commission will be worth €1.1 trillion and will include the coronavirus recovery fund, according to sources familiar with the matter.

Equities are up, with US futures poised to extend its Tuesday’s rally as it trades at levels not seen in almost three months. In this scenario, seems unlikely that the dollar could gather strength.

The macroeconomic calendar had little to offer throughout the European session, while the US published the MBA Mortgage Applications for the week ended May 22, which were up by 2.7%. Later today, the country will publish the Richmond Fed Manufacturing Index for May, foreseen at -47 from -53 previously.

EUR/USD short-term technical outlook

The EUR/USD pair trades around 1.1000 ahead of the US opening as the greenback is seeing some demand. The short-term picture supports further advances, as, in the 4-hour chart, it has met buyers around its 20 SMA, which slowly gains upward traction. Furthermore, technical indicators turned firmly higher well into positive levels, maintaining its positive momentum near overbought levels. The pair would need to surpass the mentioned daily high now to confirm a new leg north, although if it losses the 1.0960 support, bulls will get discouraged and the pair would be at risk of a steeper decline.

Support levels: 1.0960 1.0925 1.0890

Resistance levels: 1.1030 1.1065 1.1100

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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