EUR/USD Forecast: Euro could encounter next resistance at 1.0950
- EUR/USD edged higher after closing the previous week above 1.0900.
- 1.0950 aligns as the next resistance for the pair.
- The risk perception could impact EUR/USD's action in the absence of high-impact data releases.
EUR/USD gained more than 2% in the previous week and closed above 1.0900. The pair continued to edge higher early Monday and touched its highest level since late August above 1.0930.
The persistent selling pressure surrounding the US Dollar (USD) following the soft inflation readings for October fueled EUR/USD's impressive rally last week. At the beginning of the new week, the USD struggles to stage a rebound in the absence of high-tier macroeconomic data releases.
Following a bearish action in the Asian trading hours, US stock index futures turned positive for the day in the European morning and the Euro Stoxx 50 opened flat. In case risk flows start to dominate the action in financial markets in the second half of the day, the USD could stay on the back foot and help EUR/USD stretch higher.
On Tuesday, the Federal Reserve will release the minutes of the October 31-November 1 policy meeting. On Wednesday, the US economic docket will feature Durable Goods Orders data for October and the weekly Initial Jobless Claims ahead of the Thanksgiving Day holiday.
EUR/USD Technical Analysis
1.0950 (Fibonacci 61.8% retracement of the July-October downtrend) aligns as immediate resistance for EUR/USD. Meanwhile, the Relative Strength Index (RSI) indicator on the 4-hour chart climbed back above 70, pointing to overbought conditions. In case the pair fails to clear that hurdle and stages a technical correction, 1.0900 (psychological level, static level) could be seen as first support before 1.0850 (Fibonacci 50% retracement) and 1.0800 (50-period Simple Moving Average).
In case EUR/USD rises above 1.0950 and confirms that level as support, bulls could target 1.1000 (psychological level) and 1.1065 (August 10 high).
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Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
