EUR/USD Forecast: Bulls piling up fresh longs

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0510

United States will publish the November Nonfarm Payrolls report on Friday.
Euro Area S&P Global Manufacturing PMIs suffered downward revisions.
EUR/USD turned bullish after finally breaking above the 200 DMA.

The EUR/USD pair surged to 1.0533, its highest since June 2022, on the back of persistent US Dollar weakness. The American currency came under selling pressure late on Wednesday when US Federal Reserve (Fed) Chair Jerome Powell discussed a slower pace of quantitative tightening that could start as soon as this month.

The Greenback resumed its decline early in the American session, as US data supported Fed’s stance amid increased risks of an economic downturn. The Personal Consumption Expenditures (PCE) Price Index rose by 6% YoY in October, easing from 6.3%. Core PCE inflation came in at 5% in the same period, down from 5.2% in September. Also, the ISM Manufacturing PMI fell to 49 in November, down from the previous 50.2, being the first time the indicator signals contraction since May 2020.

European data was far from encouraging. German Retail Sales fell by 2.8% MoM in October, much worse than anticipated. Additionally, S&P Global released the final versions of its November Manufacturing PMIs, which were downwardly revised. The German index was confirmed at 46.2, while the Euro Area one came down to 47.1 from the previously estimated 47.3.

On Friday, the United States will publish the November Nonfarm Payrolls report (NFP). The country is expected to have added 200K new jobs in the month, down from 261K in October. The Unemployment Rate is foreseen at 3.7%, unchanged from the previous month. Ahead of the event, the Euro Area will publish the October Producer Price Index (PPI), which is expected to have contracted by 2% MoM.

EUR/USD short-term technical outlook

The EUR/USD pair’s daily chart shows that it has extended its gains beyond a mildly bearish 200 Simple Moving Average (SMA) while the 20 SMA heads firmly north below it. The fact that EUR/USD broke above the mentioned 200 SMA and took over 1.0500 may encourage bulls to keep piling up long positions. At the same time, the Momentum indicator keeps heading lower within positive levels, although losing its downward strength. Finally, the Relative Strength Indicator (RSI) turned higher and currently stands at 67, all of which hints at a bullish continuation.

In the near term, and according to the 4-hour chart, chances are of another leg higher. Technical indicators maintain their upward slopes within positive levels while the pair develops above all of its moving averages. The 20 SMA is flat at around 1.0380, but the longer ones keep heading higher below it, supporting a bullish continuation.

Support levels: 1.0465 1.0420 1.0375

Resistance levels: 1.0540 1.0585 1.0630

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.