EUR/USD Forecast: Poised to challenge April high at 1.1075

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1052

US Durable Goods Orders were mixed in March, impressive headline brings optimism.
Stock markets hesitate around their opening levels despite encouraging earnings reports.
EUR/USD bullish case will become stronger once above 1.1075.

The EUR/USD pair changed course on Wednesday and traded near its weekly high at 1.1066 after bottoming Tuesday at 1.0936, up over 100 pips during the European session. The pair currently stands in the 1.1050 price zone, with the US Dollar weakening against its European rivals.

The American currency fell as the sentiment shifted. Solid earnings reports from American big names released after Wall Street’s close pushed US futures into the green. However, Asian and European indexes were unable to follow such a lead. Most stock markets trade in the red, with limited losses, suggesting caution among speculative interest. Yet at the same time, the Greenback trades lower against most major rivals, clearly reflecting its broad weakness.

The Euro found support in the German Gfk Consumer Confidence Survey, which improved in May to -25.7 from -29.3 in April, beating expectations. Across the pond, the United States published March Durable Goods Orders, which rose by 3.2% MoM, much better than anticipated. The Nondefense Capital Goods Orders ex Aircraft, however, declined by 0.4%, overshadowing the encouraging headline. At the same time, the preliminary estimate of March Wholesale Inventories beat expectations by raising 0.1% MoM.

EUR/USD short-term technical outlook

The EUR/USD pair is technically bullish, although still waiting for a catalyst. The daily chart shows that it bounced from near a bullish 20 Simple Moving Average (SMA), which has been attracting buyers since mid-April. The longer moving averages advance below it, with the 100 SMA currently crossing above 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly slump. At the same time, technical indicators turned higher, although still stuck to familiar levels and without enough strength to confirm a sustained bullish extension. The pair would need to clear 1.1075, April monthly high, to gain upward momentum, an unlikely event ahead of US first-tier data scheduled for Thursday.

The 4-hour chart shows that EUR/USD currently stands above all its moving averages which offer modest upward slopes. The 100 SMA stands below the weekly low, reinforcing the 1.0930 region as a support area. Finally, technical indicators are losing their upward momentum but remain well above their midlines, reflecting the absence of selling interest.

Support levels: 1.1030 1.0985 1.0930

Resistance levels: 1.1075 1.1120 1.1165

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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