EUR/USD Forecast: Eyes on 1.2349 amid broad dollar’s weakness

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2221

EU Gross Domestic Product confirmed at -0.6% QoQ in the three months to March.
US housing-related data unexpectedly fell in April, adding pressure on the greenback.
EUR/USD trades at its highest since February and is poised to extend its advance.

The EUR/USD pair surged to 1.2233, its highest since last February, maintaining its bullish strength and pressuring the mentioned high ahead of Wall Street’s opening. The dollar plummeted as US Federal Reserve officials reaffirmed the commitment to maintain their ultra-loose monetary policy, despite rising inflationary pressures. Stocks recovered in Asia, leading to positive developments in Europe. Meanwhile, US Treasury yields remain unchanged on a daily basis, weighing on a potential dollar’s demand.

On the data front, Europe published a revision of the first quarter Gross Domestic Product, which matched the previous estimate by printing at -0.6% QoQ. The annual reading was also unchanged at -1.8%. The US published April Building Permits, which increased a modest 0.3%, while Housing Starts in the same month fell 9.5%. The market showed no reaction to US housing-related figures.

EUR/USD short-term technical outlook

The EUR/USD pair is trading at daily lows, overbought in the near-term but still poised to extend its advance. The 4-hour chart shows that technical indicators hold to extreme levels despite decelerating, as the price moves above all of its moving averages, with the 20 SMA accelerating north above the longer ones. The pair could extend its advance once above 1.2240, the immediate resistance level, heading towards 1.2349, the year high.

Support levels: 1.2180 1.2140 1.2095

Resistance levels: 1.2240 1.2290 1.2330

View Live Chart for the EUR/USD

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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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