EUR/USD Forecast: Corrective recovery still short of becoming a trend-change
EUR/USD Current Price: 1.0885
- Market players are trying to recover the lost optimism, Wall Street posts modest recovery.
- Absence of macroeconomic data leaves financial assets in the hands of sentiment.
- EUR/USD is hovering around 1.0900, bullish potential still limited.
The EUR/USD pair has tried to extend its advance but was unable to, ending Wednesday pretty much unchanged at around 1.0880. The pair peaked at 1.0908 during European trading hours and bottomed at 1.0854 with Wall Street’s opening. The absence of relevant macroeconomic data kept the markets in the hands of sentiment, this last driven by coronavirus-related headlines. Asian and European equities edged lower, although decelerating the pace of their slump, while US indexes recovered some of the ground lost these last couple of days, somehow indicating a better market mood. Still, concerns about the outbreak persist, as it extends in Europe.
The US released January New Home Sales, which unexpectedly rose 7.9% in the month, more than doubling the market’s expectations of 3.5%. Thursday will bring the preliminary estimate of the German February inflation, seen at 0.8% YoY. The EU will release February Consumer Confidence, while the US will publish January Durable Goods Orders, foreseen at -1.5%, and the second estimate of Q4 GDP expected unchanged at 2.1%.
EUR/USD short-term technical outlook
The EUR/USD pair is battling to advance beyond the 38.2% retracement of its latest daily slump, and also above a bearish 100 SMA in the 4-hour chart. In the mentioned time-frame, the 20 SMA maintains its bullish slope below the current level, converging with a Fibonacci support level and reinforcing it at 1.0850. Technical indicators, in the meantime, have spent the day within positive levels, now turning flat below their weekly highs, lacking enough momentum to confirm further gains ahead.
Support levels: 1.0850 1.0810 1.0770
Resistance levels: 1.0900 1.0935 10975
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.
