EUR/USD Forecast: Bulls timidly adding, aim for 1.0900

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0789

Better than anticipated, Eurozone Composite PMIs underpin the Euro.
The United States calendar will bring a couple of Federal Reserve speakers.
EUR/USD is bullish in the near term and poised to run past 1.0811, Friday’s high.

The EUR/USD pair posts modest gains on Monday, trading in the 1.0780 price zone ahead of Wall Street’s opening. A better market mood weighs on the US Dollar’s demand while encouraging Eurozone data underpins the Euro. At the same time, holidays in Japan and the United Kingdom (UK) limit intraday activity.

The euro area’s economic recovery progressed further at the start of the second quarter, according to the latest Hamburg Commercial Bank (HCOB) PMI survey. The EU Services PMI was confirmed at 53.3 in April, up from a preliminary estimate of 52.9. The Composite PMI hit 51.7 in the same month, the highest in eleven months. On a negative note, the report also signalled stronger inflationary pressures across the Union in April. Nevertheless, the indexes in major European economies came above 50, the threshold separating economic expansion from contraction.

The Eurozone published the March Producer Price Index, which contracted 0.4% MoM and 7.8% YoY and May Sentix Investor Confidence, which improved to -3.6 from -5.9 in April. The United States (US) macroeconomic calendar includes a couple of Federal Reserve (Fed) speakers and short-term bill auctions.

EUR/USD short-term technical outlook

From a technical point of view, EUR/USD is bullish. The daily chart shows it further advanced beyond a bearish 20 Simple Moving Average (SMA), while a directionless 200 SMA provides dynamic resistance at around 1.0800. At the same time, technical indicators advance within positive levels with a modest bullish momentum but are still heading north.

Near-term technical readings also support a bullish extension. The EUR/USD pair trades above all its moving averages, while the 20 SMA gains upward traction above a flat 100 SMA. The 200 SMA, in the meantime, provides near-term support at around 1.0750. Finally, technical indicators resumed their advances above their midlines after correcting overbought conditions. The pair hit 1.0811 on Friday, the level to beat for another leg north towards the 1.0900 price zone.

Support levels: 1.0750 1.0700 1.0695

Resistance levels: 1.0810 1.0840 1.0885

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

The EUR/USD pair loses ground to around 1.1905, snapping the two-day winning streak during the early European trading hours on Tuesday. Markets might turn cautious ahead of the release of key US economic data, including US employment and inflation reports that were pushed back slightly due to the recently ended four-day government shutdown.

GBP/USD edges lower below 1.3700 on UK political risks, BoE rate cut bets

The GBP/USD pair trades on a weaker note around 1.3685 during the European session on Tuesday. The Pound Sterling edges lower against the US Dollar amid political risk in the United Kingdom and rising expectations of near-term Bank of England rate cuts.

Gold drifts lower as positive risk tone tempers safe-haven demand; downside seems limited

Gold drifts lower during the Asian session on Tuesday and snaps a two-day winning streak, though it lacks strong follow-through selling and shows some resilience below the $5,000 psychological mark amid mixed cues. 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.

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.