EUR/USD Forecast: Bulls to challenge a critical Fibonacci resistance
EUR/USD Current Price: 1.1762
- Tepid European macroeconomic data was overshadowed by the risk-on sentiment.
- The US official ISM Manufacturing PMI is foreseen in September at 56.3.
- EUR/USD is trading near weekly highs but still needs to break above 1.1770.
The EUR/USD pair jumped to 1.1769 in a quite volatile European session. Headlines related to a US coronavirus aid package and Brexit have shaken the FX board, although, at the time being, the market’s mood is upbeat, amid hopes both conflicts will reach safe ports. As long as risk-on prevails, the greenback will remain under selling pressure.
The shared currency is up, despite some weak macroeconomic figures released earlier in the day. The EU unemployment rate resulted at 8.1% in August as expected, rising for a fifth consecutive month. Also, the final versions of Markit PMIs for the Union suffered revisions, with the German index down to 56.4 from 56.6 previously estimated. The index for the EU remained unchanged at 53.7.
Ahead of Wall Street’s opening, the US has just released Initial Jobless Claims for the week ended September 25, which printed at 837K, better than the 850K expected. Personal Spending was up 1.0% in August, beating expectations although Personal Income in the same month fell 2.7%. The core PCE inflation in the country was up to 1.6% from 1.4%, beating expectations. The market is now waiting for the official ISM Manufacturing PMI, foreseen in September at 56.3.
EUR/USD short-term technical outlook
The EUR/USD pair is bullish in the short-term, trading near the 61.8% retracement of its latest daily decline. The risk is skewed to the upside, according to technical readings in the 4-hour chart, but still needs to accelerate above the mentioned daily high to confirm a new leg north. In the mentioned time-frame, the 20 SMA maintains its bullish slope below the current level, while the 100 SMA heads lower around the mentioned daily high. Technical indicators, in the meantime, have turned higher, but the momentum remains limited.
Support levels: 1.1720 1.1670 1.1625
Resistance levels: 1.1770 1.1810 1.1850
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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.
