EUR/USD Forecast: Dollar’s sell-off likely to continue

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2032

EU data missed expectations, but the market is all about optimism.
Currencies are posting a late reaction to upbeat data released last week.
EUR/USD is bullish in the near-term and is poised to extend its advance.

The EUR/USD pair soared after breaking above the 1.2000 level, hitting 1.2047, its highest since March 4. The greenback plunged amid an optimistic market’s mood, spurred by upbeat US data published last week. However, it’s more notable across the FX board, sort of a late reaction to Wall Street’s run. So far today, equities are struggling around their opening levels, while US Treasury yields eased, but without fireworks.

The pair retains its gains heading into the US opening, with speculative interest waiting for Wall Street’s reaction. The macroeconomic calendar has little to offer so far today, as the EU published the February Current Account, which posted a seasonally adjusted surplus of €25.9 billion, missing expectations. Construction Orders in the same month was down by 2.1% MoM, also below forecast. The US will auction 3-month and 6-month bills.

EUR/USD short-term technical outlook

The EUR/USD pair trades around 1.2030, bullish in the near-term. The 4-hour chart shows that the pair soared above a bullish 20 SMA after briefly piercing it at the beginning of the day. The Momentum indicator advances within positive levels, while the RSI has lost its bullish strength, now consolidating around 70. The risk is skewed to the upside as long as the pair holds above the 1.2000 price zone, with room for an extension towards 1.2130.

Support levels: 1.1995 1.1940 1.1900

Resistance levels: 1.2045 1.2090 1.2130

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 jumps above $5,000 as China's gold buying drives demand

Gold price rises to near $5,035 during the early Asian session on Monday. The precious metal extends its recovery amid a weaker US Dollar and rising demand from central banks. The delayed release of the US employment report for January will be in the spotlight later on Wednesday.

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.