EUR/USD Forecast: Poised to challenge the 1.2000 threshold

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1944

Upbeat US inflation figures spurred risk appetite, to the detriment of the greenback.
The German ZEW survey showed that business sentiment deteriorated sharply in April.
EUR/USD is bullish in the near-term and could extend its advance beyond 1.2000.

The EUR/USD pair surged this Tuesday to a fresh 3-week high of 1.1947, ending the day nearby. The dollar advanced at the beginning of the day, gaining the most strength ahead of Wall Street’s opening and after the FDA paused the application of the Johnson & Johnson coronavirus vaccine due to at least six cases of severe blood clots related to the shot. Stocks plummeted, providing temporary support to the greenback, although the release of US inflation data put a halt to equities´ slide and pressured the greenback.

The US March Consumer Price Index jumped to 2.6% YoY, while the core reading hit 1.6%, both beating the market’s expectations. US Treasury bond yields ticked higher as an immediate response to the headline but edged lower afterwards. Earlier in the day, Germany published the ZEW Survey on Economic Sentiment, which missed the markets’ expectations, as business sentiment contracted to 70.7 in April in the country and to 66.3 in the EU.

On Wednesday, the EU will publish February Industrial Production, expected to have declined by 1.1% in February. The US macroeconomic calendar has little to offer, although US Federal Reserve chief Jerome Powell is due to speak at the Economic Club of Washington, while multiple other Fed’s officials will participate in different events.

EUR/USD short-term technical outlook

The EUR/USD pair is trading near the mentioned daily high ahead of the Asian opening, bullish in the near-term. The 4-hour chart shows that the price is comfortable above all of its moving averages, with the 20 SMA crossing above the 200 SMA, both around 1.1900. Technical indicators have advanced within positive levels, partially losing their strength near overbought readings.

Support levels: 1.1920 1.1870 1.1825

Resistance levels: 1.1965 1.2000 1.2045

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.