EUR/USD Forecast: Risk appetite woke up the shared currency

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2222

Q4 US Gross Domestic Product was upwardly revised to 4.1% as expected.
An upbeat market mood keeps bond yields and equities on the winning side.
EUR/USD is in recovery mode and heading towards 1.2349.

The EUR/USD pair trades above 1.2200 for the first time since early January, as the risk-related sentiment turned on. The dollar is down, global equities are up and US government debt yields reach fresh one-year highs. The shared currency woke up after lagging for a couple of weeks, maintaining its bullish momentum despite other dollar rivals eased from daily highs.

On the data front, the day has been quite busy. Germany published the March GFK Consumer Confidence Survey, which improved to -12.9 from -15.5. The EU Economic Sentiment Indicator printed at 93.4 in February from 91.5 in the previous month. The US has just published January Durable Goods Orders, with the headline reading coming at 3.4%, vs the 1.1% expected. Initial Jobless Claims for the week ended February 17 improved to 730K, while the Q4 Gross Domestic Product was upwardly revised to 4.1% as expected.

EUR/USD short-term technical outlook

The EUR/USD pair trades around 1.2220 ahead of Wall Street’s opening, near a daily high of 1.2237. The near term picture is bullish, as the 4-hour chart shows that the pair accelerated north above all of its moving averages. It is also trading well above the 23.6% retracement of its November/January rally, aiming to complete a full retracement to 1.2349. In the mentioned chart, technical indicators have partially lost their bullish strength, but hold near their daily highs and well into positive levels, keeping the risk skewed to the upside.

Support levels: 1.2210 1.2170 1.2120

Resistance levels: 1.2240 1.2295 1.2350

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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