EUR/USD Forecast: Still aiming to test the 1.1000 threshold
EUR/USD Current Price: 1.0927
- European economic sentiment improved in May according to the ZEW Survey.
- The market’s sentiment somehow deteriorated after an optimistic Monday.
- EUR/USD holding on to most of its weekly gains bears side-lined.
The EUR/USD pair is ending Tuesday with modest gains, after trading as high as 1.0975 during the European session. The pair rallied throughout the first half of the day amid the persistent positive sentiment, also backed by encouraging European data. The German ZEW Survey, which showed that the Economic Sentiment in the EU improved to 46 in May, much better than the -12.1 forecast, while for Germany it also improved to 51 from 28.2, although the assessment of the current situation in the country plunged to -93.5 from -91.5.
Asian equities rallied, but European indexes struggled to gain ground, ending the day mixed, as the mood softened. The French Finance Minister Bruno Le Maire said that the European Union recovery fund proposed by Germany and France, probably will not be available until 2021. Wall Street also ended mixed, as US housing data disappointed with April’s Building Permits falling by 20.8% and Housing Starts declining by 30.2% in the same month. Fed’s chief Powell testified before the Congress but failed to impress, centring its testimony in the need for financial aid throughout the crisis.
This Wednesday, the EU will publish its April inflation data, foreseen at 0.4% YoY and the preliminary estimate for the May’s Consumer Confidence, expected to have slid to -24 from -22.7 in April. The US will publish the Minutes of the latest FOMC’s meeting.
EUR/USD short-term technical outlook
The EUR/USD is trading in the 1.0930 price zone, and still has room to extend its advance, according to intraday charts. The 4-hour chart shows that the pair is comfortable well above all of its moving averages, with the 20 SMA about to cross above the larger ones, all of them around the 1.0850/70 area. Technical indicators, in the meantime, are stable around overbought levels, although fr from suggesting an upcoming side. The risk could turn to the downside on a break below 1.0890, and especially if the market’s sentiment continues to deteriorate.
Support levels: 1.0920 1.0890 1.0860
Resistance levels: 1.0950 1.0985 1.1010
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.
