The EUR/USD pair is closing higher for a fourth consecutive week, and barely below its yearly high of 1.0828 posted last February, as markets centered in unwinding the Trump trade this past week, dumping USD-related assets, and with Wall Street suffering its worst day since October last Wednesday. There were no big news to drive the FX market, with the most relevant figures being mixed housing data in the US, and European PMIs this Friday, indicating the that economic growth keeps advancing, at its fastest pace in over five years according to Markit preliminary numbers for March.
Ahead of the weekly close, speculative interest is waiting for political definitions coming from the US, with majors stuck in range, but also with the dollar generally weak across the board. The US Congress is yet to vote on the Obamacare repeal bill proposed by President Trump, who is struggling to find support even within its own party. The bill has entered the Houses on Thursday, and is still unclear whether policy makers will reach an agreement this Friday or not. Despite the healthcare bill is not the most relevant for financial markets, but is seen as a test of the new US administration, as if Trump gets defeated, hopes for a tax reform or large infrastructure investment will continue to dilute, therefore implying lower US equities and USD.
Technically, the EUR/USD pair has advanced up to a major resistance area, printing 1.0824 before retreating modestly. Not only February monthly high stands at 1.0828, but at 1.0820, the pair has the 50% retracement of its post-US election slump. The pullback from the mentioned high has been quite shallow, as the pair held above the 1.0760 level, indicating that selling interest is quite limited.
In the weekly chart, technical indicators keep advancing above their mid-lines, whilst the price is further above a still bearish 20 SMA. The 100 SMA in the mentioned chart stands at 1.1013, a possible bullish target should the pair continues advancing past the 1.0830 region. In the middle, the 61.8% retracement of the post-US election decline offers resistance at 1.0930.
In the daily chart, the Momentum indicator heads north at fresh monthly highs within overbought territory, whilst the RSI is horizontal around 62, reflecting the weekly range. Still the 20 DMA maintains its bullish slope above the 100 DMA, both well below the current level, supporting further advances.
The pair has a strong support around 1.0710, and it will take a break below it to confirm an interim top and favor a move lower towards 1.0635, while below this last, the next relevant support comes at 1.0565, although ongoing dollar's weakness makes unlikely a decline towards this last next week.
The FXStreet Forecast Poll, a measure of market's sentiment, indicates that the EUR/USD pair is gaining adepts, as 60% of experts are expecting an upward move, although not one sees the pair reaching 1.1000. Sentiment suffers a drastic u-turn in the longer run, as only 22% favor the upside in the 1 and 3 months views, while bears account for 50% and 67% respectively. Despite ongoing dollar's weakness, seems speculative interest is unwilling to fully give up on the USD.
Bears dominate the GBP/USD pair after it was unable to break above 1.2500 these days, but mostly due to the upcoming Brexit, and its unknown implications. 80% of the polled experts expect a decline during the upcoming month, with 1.2227 being the average target. For the quarterly view, the pair is seen near 1.2100, with bulls being just 9% and bears 73%.
For the USD/JPY, bullish are still a majority, but the upward targets keep decreasing: for the three-month view, bulls account for the 65%, but the average target is now 113.99, down from previous week's 114.81. In the shorter term, the pair is seen neutral, holding below the critical resistance at 111.60, former yearly low, broken this week.
.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.