EUR/USD Forecast: modestly bullish, 1.0650 still caps
The EUR/USD pair advanced in quiet Asian trading, with the dollar still pressured short-term across the board against all of its major rivals, but the Pound. Markets' mood improved with the release of Chinese inflation figures, as despite the headline CPI rose below expected, core inflation rose beyond expectations, while factory gates price gained to their highest since September 2011, printing 5.5% in December.
There are no relevant macroeconomic releases scheduled in the EU for today, while in the US, JOLTS jobs openings and the IBD/TIPP economic optimism index will take center stage.
The EUR/USD pair advanced up to 1.0626, so far its highest for this 2017, and struggles around the 1.0600 level, ever since the London opening, posting a modest upward intraday potential in the 4 hours chart, as the price is advancing beyond the 23.6% retracement of its latest monthly decline, while the 20 SMA converges with it around 1.0665. In the same chart, technical indicators aim modestly lower within positive territory, but with limited strength and below previous weekly highs, an indication of absent momentum.
The key resistance is 1.0650, late December high, and it would take a break above it to confirm the pair has found an interim bottom and will continue correcting higher, up to 1.0710, the 38.2% retracement of the mentioned decline. Below 1.0560, the pair will likely return to the 1.0500 region, whilst below this last, 1.0440/50 is the next support.
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.
