EUR/USD Forecast: Powell boosts the greenback

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0818

US Fed’s Powell said that policymakers are not panning to go into negative rates.
German inflation seen stable in March, US unemployment claims expected at 2.5M.
EUR/USD remains within familiar levels, despite a stronger dollar.

After starting the day with a soft footing, the greenback ends Wednesday up against all of its major rivals. The American currency got a boost from words from the Federal Reserve’s head, Jerome Powell. In a private event and when responding to questions, Powell state that US policymakers are not looking at negative rates as a possible monetary policy. "The Fed intends to continue using tools it has already tried," Powell noted, adding that FOMC participants are against them. The EUR/USD pair retreated from a fresh weekly high of 1.0880 to settle in the 1.0810 price zone.

In the data front, the EU has published March Industrial Production data, which fell by 11.3% in the month and by 12.9% when compared to a year earlier. The US, on the other hand, has just released the April Producer Price Index, which fell by 0.3% MoM and by 1.3% when compared to a year earlier, missing the market’s expectations. This Thursday, Germany will publish April inflation data, seen up by 0.8% YoY, unchanged from March. During the American afternoon, the focus will be on US weekly jobless claims, seen up by 2.5M.

EUR/USD short-term technical outlook

The EUR/USD has remained within familiar levels, overall neutral. The 4-hour chart shows that a directionless 200 SMA continued to cap advances, with the pair now hovering around an also flat 20 SMA. Technical indicators, in the meantime, have turned lower, although they remain stuck to neutral levels. Bears could have better chances on a break below 1.0790, a strong static support level, although it seems unlikely that the pair could extend its decline far below this last during the upcoming sessions.

Support levels: 1.0790 1.0755 1.0720

Resistance levels: 1.0890 1.0920 1.0950

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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