EUR/USD Forecast: Ready to challenge the monthly high

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1816

Hopes for a US coronavirus stimulus package continues to pressure the greenback.
Generally positive macroeconomic data support the risk-on mood.
EUR/USD is bullish, could gain momentum on a break above 1.1830.

The EUR/USD pair is extending its advance this Tuesday, having reached so far a daily high of 1.1817. The dollar is on its back foot amid mounting hopes about a US fiscal aid package, as US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi had speed up negotiations. Worth noting that Pelosi set a 48-hour deadline to clinch a deal that ends this Tuesday. The shared currency, in the meantime, benefits from a scarce macroeconomic calendar, and investors digesting the latest coronavirus developments in the Union.

The macroeconomic calendar has little relevant to offer until the end of the week. Still, the EU published the August Current Account, which posted a seasonally adjusted surplus of €19.94 B. Also, the German Producer Price Index came in at 0.4% MoM in September, down by 1.0% when compared to a year earlier, beating the market’s expectations. As for the US, the country released September Building Permits, which rose 5.2%, beating the market’s expectations and Housing Starts for the same month that missed estimates by printing a 1.9% monthly gain.

EUR/USD short-term technical outlook

The EUR/USD pair is holding above 1.1800, not far from its October high at 1.1830, the immediate resistance level. The pair is bullish in the near-term, as the 4-hour chart shows that technical indicators keep advancing within positive levels, accelerating north near overbought readings. In the mentioned time-frame, the pair is also developing above all of its moving averages, although with the 20 SMA still below the larger ones. Beyond the mentioned monthly high, the pair has room to extend its advance to 1.1870, a strong static resistance level.

Support levels: 1.1770 1.1725 1.1680

Resistance levels: 1.1830 1.1870 1.1915

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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