EUR/USD Forecast: Dollar bulls on pause

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1846

US August core inflation beat expectations providing support to the greenback.
AstraZeneca and Oxford announce they resumed testing of their coronavirus vaccine.
EUR/USD bullish potential limited needs to recover above 1.1915.

The EUR/USD pair posted a modest advance last Friday, ending the week unchanged around 1.1840. Weaker demand for the dollar was the main driver of the pair, as the American currency remained out of the market’s radar throughout the first half of the day. It recovered some poise in the final trading session of the week, following the release of upbeat US inflation. According to the official report, core annual inflation picked up in August, improving to 1.7% from 1.6% in the previous month. German inflation, on the other hand, was confirmed at -0.1% YoY. The market’s mood, however, remained sour, with equities pulling off their highs ahead of the close to end the day mixed.

Over the weekend, AstraZeneca and Oxford announced they would resume their coronavirus-vaccine tests, which were interrupted due to possible side effects in one participant. The news could bring back risk-on, although temporarily. This Monday, the EU will publish July Industrial Production, seen up 10% in the month, while the US macroeconomic calendar will remain empty.

EUR/USD short-term technical outlook

The EUR/USD pair is trading around the 38.2% retracement of its September decline, neutral-to-bullish in the daily chart. It’s stuck around a flat 20 DMA but holding above the larger ones, while technical indicators are modestly advancing above their midlines. In the shorter-term, and according to the 4-hour chart, however, the bullish potential is limited. The pair is hovering around directionless moving averages, the Momentum indicator turned lower within positive territory, while the RSI indicator consolidates within neutral levels. The pair could become more interesting for bulls once above 1.1915, the 61.8% retracement of the mentioned decline.

Support levels: 1.1810 1.1760 1.1725

Resistance levels: 1.1860 1.1915 1.1950

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold holds gains near $5,000 as China's gold buying drives demand

Gold price clings to the latest uptick near $5,000 in Asian trading on Monday. The precious metal holds its recovery amid a weaker US Dollar and rising demand from the Chinese central bank. The delayed release of the US employment report for January will be in the spotlight later this week.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.