EUR/USD Forecast: Optimism keeps pushing it higher

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1161

Economic reopenings and falling coronavirus-related cases underpin the shared currency.
Civil unrest in the US escalates and weighs on the American currency.
EUR/USD retreating from highs but still on the bullish side.

The EUR/USD pair has continued to rally on the back of the dollar’s broad weakness, reaching so far this Tuesday 1.1187, its highest level since mid-March. The market continues to dump the greenback amid riots in the US getting worse day by day. The shared currency, on the other hand, is finding support in economic reopenings, as coronavirus-related numbers continue to decrease. German foreign minister Maas said the country is preparing to lift travel warnings for the EU and other countries.

The EU didn’t publish macroeconomic data today, with the focus on an ECB’s monetary policy decision to be out next Thursday. As for the US, the calendar will also be light, as the country will publish the ISM-NY Business Conditions Index for May, previously at 4.3, and May Total Vehicle Sales previously at 11.4 million.

EUR/USD short-term technical outlook

The EUR/USD is trading in the 1.1160 price zone, underpinned by a generalized good mood and global equities trading firmly in the green. In the 4-hour chart, a sharply bullish 20 SMA stands at around 1.1105 providing dynamic support. The RSI indicator is barely retreating from overbought readings, but the Momentum indicator is drawing a bearish divergence, as while the price reaches higher highs, the indicator posts lower highs. Still above its 100 level, the risk of a sharp decline is limited as long as the pair holds above the mentioned moving average.

Support levels: 1.1105 1.1070 1.1025

Resistance levels: 1.1190 1.1225 1.1260

View Live Chart for the EUR/USD

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.

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