EUR/USD Forecast: Bulls took over with Lagarde’s optimism

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1889

ECB left its monetary policy unchanged, reaffirmed the need for ample support.
Governing Council has reportedly agreed that there is no need to overreact to euro gains.
EUR/USD firmly bullish and heading towards the yearly high at 1.1911.

The EUR/USD pair is up this Thursday, trading around 1.1890 as ECB’s Lagarde speaks. Easing dollar’s demand alongside an on-hold ECB is backing the shared currency this Thursday. Words from the ECB´s head are hawkish, as suspected after yesterday rumours. Despite persistent uncertainty, Lagarde started her speech mentioning a strong rebound in macroeconomic activity, although noting that it’s still below pre-pandemic levels and adding that ample accommodative support is needed.

Among other things, Lagarde referred to the exchange rate, saying that policymakers will carefully assess developments, including it. Also, the Governing Council has reportedly agreed that there is no need to overreact to euro gains, boosting the pair.

Meanwhile, the US published Initial Jobless Claims for the week ended September 4, which came in at 884K, worse than anticipated. The country also published August PPI which beat expectations but remained in the red at -0.2% YoY.

EUR/USD short-term technical outlook

The EUR/USD pair has trimmed 50% of its latest losses and is technically bullish in the short-term. The 4-hour chart shows that the price has broken above all of its moving averages, while technical indicators head firmly higher within positive levels. The 61.8% retracement of its latest daily slump comes at 1.1910, the immediate resistance level. A break above this last would open doors to a retest of the year high at 1.2011.

Support levels: 1.1850 1.1810 1.1760

Resistance levels: 1.1910 1.1950 1.1990

View Live Chart for the EUR/USD

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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.

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