EUR/USD Forecast: Next stop, 1.1910? Trio of bullish factors shows points to fresh gains

• EUR/USD has advanced as weak US data increases the chances of ongoing dollar printing.
• Upbeat euro zone data and covid stats will likely keep the common currency bid.
• Thursday's four-hour chart is showing bulls are in full control.

"Hold on, The only way is up" – goes the 1980s song by Yazz, which seems appropriate for EUR/USD steady upside march of nearly 200 pips in two weeks. Is there more in store? On Thursday, the world's most popular currency pair has three good reasons to rise. 

1) Data defeats dollar

It started with the downbeat Consumer Confidence figure from the Conference Board and became worse on Wednesday. ADP reported an increase of only 374,000 private-sector jobs, signaling to markets that Friday's all-important Nonfarm Payrolls will likely be weaker than expected. 

USD: ADP raises red flag for Nonfarm Payrolls

The ISM Manufacturing Purchasing Managers' Index beat estimates on the headline – but the all-important employment component reflects contraction at 49 points. That is another warning sign toward the all-important jobs report.

Federal Reserve Chair Jerome Powell refrained from committing to tapering the bank's bond-buying scheme in Friday's Jackson Hole speech and critical figures such as the NFP are make-or-break for the bank. Will the jobs report be that bad? Not necessarily. ADP's figures have been poorly correlated with the official NFP and the manufacturing sector is only a small part of the US economy.

Nevertheless, the dollar is set to remain under pressure on Thursday. Weekly unemployment claims are projected to drop and any minor uptick could add to dollar pressure. Fed member Raphael Bostic expressed concerns about the expiry of federal unemployment benefits and their impact on the economy. Bostic may repeat such worries in a public appearance on Thursday. His colleague Mary Daly – a dove – is also scheduled to speak and could add to the pressure. 

See Nonfarm Payrolls August Preview: Sine qua non for the taper

2) Euro boom?

Final Eurozone Manufacturing PMIs broadly beat expectations, adding to calls from European Central Bank hawks to reduce the institution's bond-buying scheme. The ECB seemed to have a steady hand regarding stimulus, but things changed after Tuesday's robust inflation figures for August. 

While doves such as ECB President Christine Lagarde will likely prevent a taper announcement in next week's decision, it seems like a matter of time. 

The old continent is also ahead of the US in vaccinations, despite a poor start, and is suffering from far fewer covid cases at this point. 

3) EUR/USD Technicals look bullish

Euro/dollar is benefiting from upside momentum on the four-hour chart and has left dust behind it after topping the 200 Simple Moving Average. At the same time, the Relative Strength Index (RSI) is below 70, thus outside overbought conditions. The currency pair has also tentatively broken above a downtrend resistance line that was formed back in July.

Overall, bulls have the upper hand.

Resistance is at the fresh September high of 1.1860, a level that also held the pair back in early August. The next noteworthy cap is only at 1.1910, which was July's high point. Further above, 1.1945 and 1.1975 are eyed. 

Support is at 1.1830, which provided support a month ago, followed by 1.1810 and 1.1780.