EUR/USD Forecast: Poised to challenge a critical resistance level

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1862

Dollar in sell-off mode amid renewed optimism about a US stimulus package.
US Treasury yields advanced to fresh multi-week highs, play against the greenback.
EUR/USD is technically bullish and could regain the 1.1900 threshold.

The EUR/USD pair has extended its weekly advance to 1.1870 this Wednesday, amid persistent dollar’s weakness. Overnight, talks about a US stimulus aid package provided support to the high-yielding EUR, as US Treasury Secretary Steven Mnuchin and House Leader Nancy Pelosi reported progress in trade talks, and said they would continue negotiations this Wednesday.

The greenback remained under pressure, despite the sour tone of equities, with European indexes in the red, dragging US futures lower. A sign of diminished dollar’s demand comes from government bonds, as US Treasury yields are sharply up and at fresh multi-week highs.

The macroeconomic calendar has no saying in price action, particularly considering there’s only minor data in the docket. The EU didn’t publish relevant numbers, while the US unveiled MBA Mortgages Applications for the week ended October 16, which were down 0.6%.

EUR/USD short-term technical outlook

The EUR/USD pair is poised to challenge the mentioned high, also a static resistance level. The 4-hour chart shows that the advance extended above all of the moving averages, while the 20 SMA accelerated north and crossed above the larger ones. Technical indicators, in the meantime, maintain their bullish slopes, despite being in overbought territory. A break through 1.1870 should see the pair regaining the 1.19 threshold during the upcoming sessions.

Support levels: 1.1830 1.1780 1.1740

Resistance levels: 1.1870 1.1915 1.1950

View Live Chart for the EUR/USD

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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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