EUR/USD Forecast: dollar´s weakness rules

The common currency lags, but chances anyway to the upside on USD weakness.
US Michigan Consumer Sentiment Index expected at 97.0 from 0revious 95.9.

Valeria Bednarik FXStreet

The dollar came under renewed selling pressure this Friday, down against all of its major rivals. The EUR/USD pair trades in the 1.2280 region, not far from the multi-year high of 1.2322 set this week. Fears of a US government shutdown have affected the greenback these last few sessions, but it's a matter of trend, with the greenback intrinsically bearish since early December. The EU released its current account for November earlier today, which recorded a surplus of €32.5 billion, beating market's expectations, although hardly relevant in terms of price action. The US will release the preliminary Michigan Consumer sentiment index for January expected at 97.0 from previous 95.9.

The common currency is a lager today, but that doesn't mean it couldn't reach higher highs today, particularly as broad-based dollar's weakness persists. The 4 hours chart presents a neutral-to-bullish stance, as the price advances slowly above a flat 20 SMA, while technical indicators stand within positive territory, but with no clear directional strength. The mentioned 1.2322 level is the immediate resistance ahead of the 1.2350 region, with gains beyond this last favoring an extension towards 1.2460 early next week. Below 1.2230, the upward potential decreases, with the next intraday supports at 1.2200 and 1.2165, this last the weekly low.

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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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