EUR/USD Forecast: Bulls lead ahead of definitions about the US stimulus package

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1827

Minor data generally resulted upbeat, investors’ focus remained elsewhere.
Speculative interest is waiting for news related to a US fiscal stimulus program.
EUR/USD is bullish in the near-term, eyeing a test of 1.1870.

The EUR/USD pair hit a fresh October high of 1.1840 this Tuesday, retreating just modestly from the level ahead of Wall Street’s close. There was no specific catalyst behind the dollar’s slump, as investors retained a cautiously optimistic stance ahead of a definition of the latest US stimulus talks, to take place during the upcoming Asian session. Equities recovered from Monday’s slump but closed mixed in Asia and Europe. US indexes recovered part of the ground lost at the beginning of the week.

Economic data indicated mild economic progress, as the EU published the August Current Account that posted a seasonally adjusted surplus of €19.94 B. Also, the German Producer Price Index came in better than anticipated. As for the US, the country released September Building Permits, which rose 5.2%, beating the market’s expectations and Housing Starts for the same month that missed estimates by printing a 1.9% monthly gain. This Wednesday, the only relevant event included in the calendar is a speech from ECB’s President, Christine Lagarde.

EUR/USD short-term technical outlook

The EUR/USD pair is trading near the mentioned high as the market prepares for US stimulus news. It is technically bullish, as, in the 4-hour chart, it has advanced further above all of its moving averages, with the 20 SMA advancing, although below the larger ones. Technical indicators, in the meantime, have reached overbought levels partially losing their bullish momentum, but maintaining the risk skewed to the upside. A steeper advance is to be expected on a break above 1.1870, now the immediate resistance level.

Support levels: 1.1810 1.1770 1.1725

Resistance levels: 1.1870 1.1915 1.1960

View Live Chart for the EUR/USD

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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.

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