EUR/USD Forecast: Remains sideways, limited under 1.1000
- US Dollar recovers amid mixed market sentiment.
- Eurozone and US S&P Global PMIs are due on Friday.
- Upside risks persist in EUR/USD while above 1.0930.
The EUR/USD continue to move sideways below 1.1000 as markets waver. The pair peaked at 1.0988, a three-day high, after US data was released and then pulled back amid mixed equity markets in the US. Consolidation remains in place as investors remain sidelined on doubts about the market’s outlook.
The accounts of the European Central Bank (ECB) March meeting showed that had it not been for the banking crisis, the central bank would have shown more conviction in signaling more hikes ahead. As banking concerns ease, expectations of more rate increases rise. At the May 4 meeting, a rate hike is a done deal, and the question is about the size: 25 or 50 basis points. Incoming data will be crucial for the decision.
Data from the US came in below expectations and weighed momentarily on the US Dollar. Initial Jobless Claims rose to 245K in the week ended April 15, above the 240K of market consensus, and Continuing Claims rose to the highest level since November 2021. The Philly Fed Manufacturing Survey tumbled from -23.2 to -31.3. Existing Home Sales dropped from 4.55 million (annual rate) to 4.44 million.
On Friday, S&P Global PMIs are due (Eurozone and US). The preliminary April reading will offer the first glance at economic activity. Those numbers will be watched closely. Negative readings could weigh on market sentiment, benefiting the US Dollar.
EUR/USD short-term technical outlook
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For the third consecutive day, EUR/USD posted a daily close around 1.0950. The pair remains unable to rise above 1.1000. The more it takes, the more likely it is to stage a significant correction. The daily chart shows the trend is up, and the price is above a bullish 20-period Simple Moving Average that stands at 1.0905.
The 4-hour chart shows EUR/USD above an uptrend line and hovering around a bearish/neutral 20-period SMA. Technical indicators show mixed signals as Momentum and Relative Strength Index (RSI) are flat around mid-lines. The bias is to the upside while above 1.0930.
A break above 1.0980 would clear the way for a test of 1.1000. A decline under 1.0930 could trigger a downside acceleration initially to 1.0900 and then to the 1.0880 support.
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
