EUR/USD Forecast: Pressuring weekly highs but lacking momentum

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2147

Dovish comments from Fed’s chair Powell hurt the greenback.
The dollar remains under selling pressure after worse than expected US data.
EUR/USD trades at weekly highs, but still below a critical resistance area.

The EUR/USD pair trades at fresh weekly highs but still confined to a tight intraday range amid the absence of a relevant catalyst. The dollar remains the weakest currency across the board, undermined by also weaker US Treasury yields. Dovish comments from US Federal Reserve chief’s Jerome Powell weighed on investors mood late on Wednesday, as he indicated that rates would remain at record lows until employment and inflation reach the desired levels, which will take longer.

The macroeconomic calendar was scarce in terms of relevant figures. Germany published the January Wholesale Price Index, which was up 2.1% in the month, but remained flat when compared to a year earlier. The US just published Initial Jobless Claims for the week ended February 5, which resulted at 793K worse than expected.

EUR/USD short-term technical outlook

The EUR/USD pair is trading near its weekly high with a positive stance, although with limited directional momentum. In the 4-hour chart, the pair is nearing a flat 200 SMA, but above the 20 and 100 SMAs, both converging around 1.2100. Technical indicators turned marginally higher within positive levels, skewing the risk to the upside. Bulls will have better chances if the pair breaks above the 1.2170/80 price zone.

Support levels: 1.2100 1.2065 1.2020

Resistance levels: 1.2170 1.2215 1.2260

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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