EUR/USD Forecast: Bulls took over, 1.1200 at sight

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1138

Optimism related to the US-China trade deal weighed on the greenback.
Market movements are being exacerbated by reduced volumes.
EUR/USD sharp bounce from critical Fibonacci level supports a bullish continuation.

The dollar came under strong selling pressure in post-Christmas trading, with volumes still low. The decline was partially triggered by the market’s optimism following comments from US and Chinese authorities, indicating that they are preparing a signing ceremony to seal phase one of the trade deal. The slump accelerated in Asian trading hours but paused with London opening. Nevertheless, the EUR/USD pair holds on to its recent gains, trading a few pips below its daily high of 1.1141.

The EU didn’t release macroeconomic data, and the US has little to offer, as it will only unveil the EIA weekly report on stockpiles, and the Baker Hughes report on active drilling rigs in the country.

EUR/USD short-term technical outlook

The EUR/USD pair is nearing the 23.6% retracement of the December rally at 1.1150, the immediate resistance, after bottoming last week around the 61.8% retracement of the same rally. In the 4-hour chart, the pair has rallied above all of its moving averages, while technical indicators pared their advances near overbought readings, far from indicating upward exhaustion. The pair has room to extend its gains toward the 1.1200 figure once beyond the mentioned Fibonacci resistance.

Support levels: 1.1120 1.1190 1.1065

Resistance levels: 1.1150 1.1185 1.1220

View Live Chart for the EUR/USD

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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