EUR/USD Forecast: Bulls hold the grip, may soon challenge 1.0480

EUR/USD Current Price: 1.0408

• The German IFO survey showed that the Business Climate improved in November.
• The US celebrates Thanksgiving, anticipating thinned market conditions ahead of the weekend.
• EUR/USD trades around 1.0400, and technical readings support further gains ahead.

The EUR/USD pair extended its weekly gains to 1.0447 early on Thursday, as the US Dollar extended its post-FOMC slide during Asian trading hours. Discouraging growth-related data added to the Greenback’s broad weakness, as the S&P Global November PMIs indicated that the American economy contracted by more than anticipated, according to preliminary estimates. Mid-European session, the USD remains on the back foot, although the pair retreated towards the 1.0400 price zone, where it currently stands.

The US celebrates the Thanksgiving holiday, which means all markets will be closed for the day. Activity will resume on Friday, although US markets are due to close early, meaning little to no activity could be expected ahead of the weekend, with no macroeconomic figures scheduled for these days. Across the pond, Germany published the November IFO survey. The Business Climate improved by more than anticipated, hitting 86.3 after the October reading was confirmed at 84.5. Expectations were up to 80, while the assessment of the current situation also improved, although by less than anticipated.

Ahead of London’s close, European indexes held on to intraday gains, limiting the advance of the US Dollar.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair shows that bulls may have paused but also that they are far from giving up. The Momentum indicator retreated from its peak within overbought readings, heading south far above its 100 level and falling short of hinting at another leg south. Meanwhile, the RSI indicator consolidates at around 65, reflecting the absence of directional strength. At the same time, the pair is hovering around its 200 SMA, battling the indicator, while the 20 SMA keeps advancing below the current level and above a flat 100 SMA.

The 4-hour chart shows an easing upward strength, as technical indicators eased from their recent peaks but hold well above their midlines. At the same time, the 20 SMA advances below the current level, slightly above a Fibonacci support level at 1.0305, the 23.6% retracement of the 0.9729/1.0480 rally. The pair needs to advance beyond 1.0480 to resume the bullish path, but it seems quite unlikely the pair could gain such momentum in tinned market conditions.

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