EUR/USD Forecast: Higher high provides hope, but concerns are here to stay

EUR/USD is "hugging" the familiar 1.1300 level once again after kicking off the week with a move to the upside. The US and China have reported progress on trade talks that concluded in Beijing on Friday and are set to resume in Washington this week. President Trump opened the door to pushing back the deadline for the negotiations, postponing potential new tariffs.

This optimism, coupled with reports of robust credit in China, helped stock markets open higher and improved the mood in markets, helping the pair rise. 

On the other hand, concerns about euro-zone growth weigh on the common currency.  Both Benoit Coeure and François Villeroy de Galhau, French members of the European Central Bank, said the ECB might have to respond if the economic weakness persists.

Last week we learned that the German economy stagnated in Q4 after contracting in the previous quarter. The German Bundesbank releases its monthly report later in the day and may add to concerns.

Apart from the German report, the calendar is quite light. American traders enjoy Presidents' Day, and this implies a thinner trading volume. 

News related to Brexit may have their say, but the euro moves on such news only if movements are significant in the pound.

EUR/USD Technical Analysis

By hitting a high of 1.1325 earlier in the day, EUR/USD set a higher high, which serves as a bullish sign. Moreover, the recent low of 1.12990, which is also the previous 2019 low, is a higher low., another constructive sign.

The turnaround awaits confirmation, and other indicators are not that bullish. Momentum remains to the downside, the Relative Strength Index is balanced, and the pair retreated below the 50 Simple Moving Average. 

Above 1.1325, resistance awaits at last week's high of 1.1345. It is followed closely by 1.1355 which was a swing high beforehand, and the next line to watch is only 1.1390 recorded in January. 

Support below 1.1290 awaits at 1.1270 which was a temporary low on the way down. The same applies to 1.1250 and the most significant level to watch is 1.1235 which is the fresh 2019 trough.