EUR/USD Forecast: Bulls take a brief pause near 50% Fibo./200-DMA confluence region

  • EUR/USD built on its recent recovery momentum amid some heavy USD selling pressure.
  • Narrowing US-German bond yield spread underpinned the euro and remained supportive.

The EUR/USD pair added to its recent recovery gains and continued scaling higher on Thursday amid the prevailing bearish sentiment surrounding the US dollar. Against the backdrop of the Fed's unlimited QE, a massive $2.2 trillion US economic stimulus package eased concerns over a global recession and prompted some heavy USD selling.

The already weaker sentiment surrounding the buck deteriorated further the Fed Chair Jerome Powell hinted towards additional monetary easing and said that there is still room for more action to combat coronavirus crisis. Adding to this, an unprecedented jump in US initial weekly jobless claims underscored the devastating impact on the economy from the coronavirus pandemic and aggravated the bearish pressure surrounding the buck.

On the other hand, the European Central Bank (ECB), in a landmark decision on Thursday, scrapped most of the bond-buying limits in its 750 billion-euro pandemic emergency program in order to boost its firepower to fight the economic fallout from the coronavirus. This coupled with a relentless decline in the US-German bond yield spread provided a strong lift to the shared currency. The positive momentum took along some near-term trading stops placed near the key 1.10 psychological mark, which further contributed to the pair's strong intraday upsurge of over 180 pips.

The pair settled near the top end of its daily trading range and climbed to near two-week tops during the Asian session on Friday, rising for the sixth consecutive session. There isn't any major market-moving economic data due for release on Friday, either from the Eurozone or the US. Hence, developments surrounding the coronavirus saga might continue to influence the broader market risk sentiment and infuse volatility in the FX market.

Short-term technical outlook

From a technical perspective, bulls now seemed to have paused near a confluence region comprising of the 50% Fibonacci of the 1.1497-1.0636 recent slump and the very important 200-day SMA. Some follow-through buying will reaffirm the recent near-term bullish trend and lift the pair further beyond the 1.1100 round-figure mark, towards testing 61.8% Fibo. level hurdle near the 1.1165-70 region. On the flip side, the 1.10 mark now becomes immediate strong support to defend. Any subsequent slide might now be seen as a buying opportunity and should remain limited near the 38.2% Fibo. level, around the 1.0965-60 region.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD extends slump after NFP shows massive job loss

EUR/USD is trading below 1.08, down on the day. The Non-Farm Payrolls report has shown a loss of 701,000 jobs, worse than expected. The ISM Non-Manufacturing PMI surprised to the upside with 52.5 points. 


GBP/USD drops below 1.23 amid sour mood, after UK data

GBP/USD has dropped below 1.23 as the market mood sours. Final UK Services PMI dropped to 34.5 points, worse than expected.  


NFP Quick Analysis: 701K jobs lost only be tip of the iceberg, why King Dollar is ready for coronation

The US lost 701,000 jobs in March, the worst in 11 years. The Non-Farm Payrolls figures are lagging the fast-moving events. Wage growth is also skewed and should be ignored. The safe-haven dollar has room to rise. 

Read more

WTI trades in three-week’s highs near $26.50 a barrel

WTI is jumping from multi-year lows following the US President Trump’s tweet of yesterday (Thursday) suggesting a Saudi-Russian deal was on the pipeline.

Oil News

Gold remains confined in a range, moves little post-NFP

Gold extended its sideways consolidative price action around the $1615 region and had a rather muted reaction to the US monthly employment details

Gold News

Forex Majors