EUR/USD Forecast: German political breakthrough open way to $1.2170, $1.2600 next

Mario Blascak, PhD Independent Analyst

The EUR/USD has been boosted massively in last two trading days by political and economic news that supported the Euro’s rise to the highest level since December 2014. Busting $1.2100 level earlier on Friday opens the way for EUR/USD to target $1.2170 next.

First, it was the minutes from December ECB meeting that supported EUR/USD revealing the willingness of the Governing Council members to modify its extremely light monetary policy in an environment of broad-based economic growth and improving economic outlook for the Eurozone.

This morning it is political news of the German political parties reaching breakthrough agreement on forming a so-called Grand coalition that has lifter EUR/USD above $1.2100 for the first time in more than three years.

Having been for three years below $1.2100 level, it takes the broad picture to analyze the potential for further moves. From the long-term perspective busting the 1.2100 level open the way for $1.2170 representing 50% Fibonacci retracement of the slide of EUR/USD from $1.4000 to cyclical low of $1.0350.

With technical oscillators including Momentum, the Relative Strength Index and Slow Stochastics all pointing upwards, the potential of moving towards the targeted $1.2170 is in place, especially as the next target is in sight of current spot rate.Should $1.2170 be broken on the upside, next target for EUR/USD is $1.2600, representing 61.8% Fibonacci retracement of the above-mentioned move lower to $1.0350.

EUR/USD daily chart

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.