EUR/USD Forecast: Bulls eyeing a retest of the year’s high
EUR/USD Current Price: 1.2252
- Fed’s vice-chair Clarida agreed that tapering could be discussed in the next meetings.
- US Consumer Confidence unexpectedly contracted to 117.2 in May, according to CB.
- EUR/USD is technically bullish and has room to retest the year high at 1.2349.
The EUR/USD pair topped 1.2266 this Tuesday, its highest since January, as the greenback eased alongside government bond yields, while the shared currency appreciated on the back of mixed German data. The dollar managed to recover some ground during US trading hours, but gains were short-lived. The pair is heading into the Asian opening trading around 1.2250. Comments from Federal Reserve's Vice Chairman Richard Clarida had little effect on financial markets, despite him taking notice of the “very unpleasant surprise” resulting from April’s inflation, adding that he agrees with the FOMC Minutes that there could be a time in upcoming meetings to discuss tapering.
Germany published a revised version of its Q1 Gross Domestic Product, which resulted at -1.8%, slightly worse than the previous estimate of -1.7%. The May IFO survey on Business Climate improved from 96.6 to 99.2, beating the market’s expectations, with Expectations rising to 102.9. The US released CB Consumer Confidence, which contracted to 117.2 in May from 121.7 in the previous month, worse than anticipated.
The EU won’t publish macroeconomic data on Wednesday, while the US calendar will remain light, as the country will publish MBA Mortgage Applications for the week ended May 21, while a couple of Fed members will offer speeches in separate events.
EUR/USD short-term technical outlook
The EUR/USD pair maintains its bullish stance and could test the year high at 1.2349 during the upcoming sessions, maintaining the bullish stance in the near-term. The 4-hour chart shows that the pair is comfortable above its moving averages, as the 20 SMA gains bullish traction above the longer ones. Technical indicators advance within positive levels, with the RSI recovering after correcting overbought readings. The bullish case will remain in place as long as the pair holds above 1.2200.
Support levels: 1.2240 1.2200 1.2165
Resistance levels: 1.2270 1.2310 1.2350
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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.
