EUR/USD Forecast: Sentiment stabilizes, bulls back in control

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2203

A better market sentiment quickly affected the dollar’s demand.
US Initial Jobless Claims contracted to 444K in the week ended May 14.
EUR/USD is struggling to extend gains, but bears have no chances.

The EUR/USD pair recovered some ground so far this Thursday, battling to extend gains beyond the 1.2200 threshold. The pair bottomed at 1.2159 on Wednesday, following the release of the latest FOMC Meeting’s Minutes, which put chances of a tighter monetary policy back on the table, spurring risk-aversion across financial markets. The mood, however, improved within Asian trading hours to stabilize during the European session.

A light macroeconomic calendar helps to maintain the volatility limited. So far today, the EU released the March Current Account, which posted a seasonally adjusted surplus of €17.8 billion and better-than-anticipated Construction Output data for the same month, up 18.3%. The US published the Philadelphia Fed Manufacturing Survey, which came in at 31.5 in May, worse than the 43 expected. Initial Jobless Claims for the week ended May 14 resulted in 444K beating the 450K expected.

EUR/USD short-term technical outlook

The EUR/USD pair is neutral-to-bullish in the near-term. The 4-hour chart shows that the pair is recovering above a mildly bullish 20 SMA, while technical indicators aim to advance within positive levels. The bullish momentum, however, is limited, and the pair would need to clear the 1.2245 level to extend its advance with a firmer tone during the upcoming sessions.

Support levels: 1.2180 1.2140 1.2095

Resistance levels: 1.2245 1.2290 1.2330

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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