EUR/USD Forecast: Corrective advance could meet sellers around 1.0960

EUR/USD Current Price: 1.0913

• The European Central Bank hinted at a rate hike in the third quarter.
• Stocks trade with a better tone, but the sentiment is far from improving.
• EUR/USD is still at risk of falling, sellers are waiting for around 1.0965.

The EUR/USD pair seesaws around the 1.0910 level, with its bearish trend intact in the FOMC Minutes aftermath. The pair reached a fresh monthly low of 1.0864 during London trading hours, bouncing afterwards amid the positive tone of European equities and easing government bond yields. Nevertheless, stocks gains are modest, while the yield on the 10-year US Treasury note stands at 2.62%, down from a multi-year high of 2.66%.

Overall, the sentiment is sour as the Eastern European crisis sees no end. The latest on the matter signals that Ukraine has presented a new proposal, although it includes discussing the situation of Crimea and Donbass, something that Russia considers unacceptable.

 Meanwhile, the European Central Bank released the Accounts of its latest meeting. The document indicates that the bond-buying program has now fulfilled its objective, and by ending it in the summer, it would clear the way for a 3Q rate hike. Additionally, Germany published February Industrial Production, which rose 0.2% MoM, while EU Retail Sales in the same month rose 0.3% MoM and 5% YoY.

Heading into Wall Street’s opening, the US released Initial Jobless Claims for the week ended April 1, which declined to 166K, beating the market’s expectations. Several Federal Reserve officials will be on the wires through the American session, while the country will release February Consumer Credit Change.

EUR/USD short-term technical outlook

The EUR/USD pair is near its daily opening at 1.0891, with the risk skewed to the downside. In the daily chart, the pair holds well below the 23.6% retracement of the year’s decline at 1.0965, the immediate resistance level. Moving averages maintain their bearish slopes well above the current level as technical indicators consolidate within negative levels.

The 4-hour chart shows that a bearish 20 SMA provides intraday resistance around the daily high in the 1.0930 region, while technical indicators advance modestly within negative levels, reflecting the ongoing advance instead of hinting at further gains. Renewed selling pressure below the 1.0870 level should lead to a test of the year’s low at 1.0805.

Support levels: 1.0870 1.0830 1.0805

Resistance levels: 1.0965 1.1020 1.1070  

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