EUR/USD Forecast: Extends gains and defies long-term resistance levels

Despite some temporary weakness that saw EUR/USD falling to an intraday low of 1.1730, the pair resumed the upward move and surpassed the post-Fed high of 1.1806 to hit its strongest level in over two years at 1.1844 during the American afternoon. The pair even rose through a long-term descending trend-line resistance coming from July 15, 2008 high of 1.6038.

The greenback continued to weaken on Thursday after the Federal Reserve reiterated its pessimistic view on the economy and following catastrophic GDP numbers for the US. Preliminary estimates showed the US economy contracted at an annualized rate of 32.9% in the second quarter, which is the worst US GDP reading on record. The consensus was around a 34.1% contraction.  In quarterly terms, the world's largest economy shrank by 9.5%, a slightly smaller contraction than the 10.1% reported by Germany earlier on the day. However, it seems that no matter what the Fed or the data points to, the sentiment continues to be against the US dollar.

The data docket for Friday includes German retail sales for June, European Union Q2 CPI and US Personal spending data for June.

EUR/USD short-term technical outlook

Technically speaking, the EUR/USD pair holds a strong bullish tone in 4-hour charts, although the RSI is entering into overbought territory. A daily close above the mentioned trend-line, currently around 1.1800, could support further gains, with next resistance at 1.1851, which is June 2018 monthly high. Above, another long-term resistance is seen at the 100-month SMA at the 1.1880 region. On the flip side, corrections should find immediate support at 1.1755, 20-period SMA in 4-hour chart, and then daily lows at the 1.1730 zone. 

Support levels: 1.1755 1.1730 1.1690 

Resistance levels: 1.1850 1.1880 1.1900