EUR/USD Forecast: ECB's dented EUR's upward potential

Valeria Bednarik FXStreet

The EUR/USD pair is trading in the 1.0730 region, pressuring the strong intraday support as dollar's recovery extends, with the USD index trying to regain the 100.00 threshold. Beyond the EUR/USD pair that stands a few pips below previous weekly low, the rest of the major pairs hold within Wednesday's range, as the Asian session brought a light macroeconomic calendar. The common currency suffered a setback this Wednesday, on market talks that the ECB has no intention to withdraw its massive stimulus program.

The EU just released its March confidence figures, which missed expectations. The Economic sentiment indicator came in at 107.9, below previous 108.00 and the expected 108.2, whilst consumer confidence remained unchanged at -5. Still pending of release its German March preliminary inflation, expected to have advanced less than during February, and the final revision of US Q4 GDP, although this last will hardly affect the market unless it suffers a strong revision from the previous estimate of 1.9%.

The 4 hours chart for the pair favors additional declines, given that in the 4 hours chart, the price is below a bearish 20 SMA, whilst technical indicators have resumed their declines after a modest upward correction within oversold territory. The pair is resting above a bullish 100 SMA, although a critical support comes around 1.0700, the 38.2% retracement of the post-US election's decline. Should the pair break below it, the bearish momentum will likely accelerate and send the pair down to the 1.0640/60 region.

Selling interest contains advances around 1.0770/80, with a recovery above it required to see an intraday recovery that can extend up to 1.0820.

View live chart of the EUR/USD

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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