EUR/USD Forecast: Dollar advances but buyers still cautious

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2192

Profit-taking and position adjustment helped the greenback recover ground.
The focus now shifts to US April Durable Goods Orders, foreseen at 0.7%.
EUR/USD trades below the 1.2200 level and could extend its decline in the near-term.

The market’s sentiment was once again behind currencies’ movements on Wednesday. The dollar fell through the first half of the day as government bond yields remained depressed while equities advanced. The positive mood changed ahead of Wall Street’s opening, helping the dollar higher. The EUR/USD pair hit an intraday high of 1.2066 but ends the day in the red below the 1.2200 level.

There was no particular catalyst for the dollar’s advance, as government bond yields remained depressed, extending their slides to fresh weekly lows while US stocks posted modest intraday advances. The macroeconomic calendar was scarce, but the greenback’s advance could be attributed to profit-taking and position adjustments amid cooling expectations from some action coming from central banks.

On Thursday, the US will publish April Durable Goods Orders, foreseen up by a modest 0.7%, and Initial Jobless Claims for the week ended May 21, expected at 425K. The country will also unveil Q1 Personal Consumption Expenditures and April Pending Home Sales.

EUR/USD short-term technical outlook

The EUR/USD pair trades near a daily low of 1.2184 and is poised to extend its decline in the near-term. The 4-hour chart shows that the pair is below a flat 20 SMA but holding above the longer ones, which maintain their bullish slopes. Technical indicators head firmly lower after crossing their midlines into negative levels, anticipating another slide, mainly on a break below 1.2165, the immediate support level.

Support levels: 1.2165 1.2120 1.2075

Resistance levels: 1.2225 1.2270 1.2310

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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