EUR/USD Forecast: Pause ahead of another leg north

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1024

Major central banks announced they would reduce the frequency of their operations with Fed.
Speculative interest focused on American data and earnings reports.
EUR/USD holds above 1.1000, awaits a reason to resume its advance.

The EUR/USD pair trades a handful of pips above the 1.1000 threshold after peaking earlier in the day at a fresh two-week high of 1.1066. The US Dollar changed course early in Asia, gathering additional momentum throughout the European morning.

The catalyst for the broad US Dollar’s demand was a joint announcement from major central banks. The European Central Bank (ECB), the Bank of Japan (BoJ), the Bank of England (BoE) and the Swiss National Bank (SNB) announced they would reduce the frequency of their dollar operations with the Fed from daily to once per week.

Meanwhile, the European macroeconomic calendar had nothing relevant to offer, although the US session will bring some exciting figures. The United States will publish April CB Consumer Confidence, March New Home Sales and the Richmond Fed Manufacturing Index for April. Additionally, speculative interest will monitor earnings reports to assess the chances of an economic setback.

EUR/USD short-term technical outlook

The EUR/USD pair heads into Wall Street’s opening hovering around 1.1020, with its bullish potential intact. The daily chart shows that EUR/USD keeps developing above bullish moving averages, with the 20 Simple Moving Average (SMA) advancing above the longer ones and providing dynamic support in the 1.0930 region. Technical indicators, in the meantime, remain within positive levels but lack directional strength. The pair needs to surpass the monthly high at 1.1075 to gather additional momentum.

The 4-hour chart shows that the retracement hardly suggests another leg south coming in the near term. Technical indicators eased from their weekly peaks near overbought readings and head lower, although well above their midlines. At the same time, moving averages maintain their upward slopes below the current level, with the 20 SMA accelerating higher above the longer ones.

Support levels: 1.0985 1.0930 1.0880

Resistance levels: 1.1075 1.1020 1.1065

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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