EUR/USD Forecast: Timid buying keeps the bullish trend in place

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0532

German Factory Orders were better than anticipated, underpinning the EUR.
The US session will bring little of interest, with direction depending on mood.
EUR/USD recovers despite tepid market sentiment, 1.0600 still in sight.

The EUR/USD pair recovered some ground on Tuesday, but action across the FX board is dull. The pair trades at around 1.0530, up from an intraday low of 1.0475. The EUR found mild support in better-than-anticipated German data, as October Factory Orders rose 0.8% MoM, while the year decline was 3.2%, much better than the 7.5% slide expected.

Investors are cautious ahead of the US Federal Reserve monetary policy decision. On the one hand, economic data suggest the economy remains strong while inflationary pressures are still high. On the other, policymakers anticipated a slower pace of tightening by highlighting the risk of an economic downturn. Uncertainty weighs on demand for riskier assets, with Wall Street on the back boot and the US dollar finding room to recover ground. Still, demand for the greenback is limited, and the American currency remains close to multi-month lows against most of its major rivals.

The US session will be light regarding macroeconomic data, as the country will publish the October Goods and Service Trade Balance, expected to post a deficit of $79.1 billion.

EUR/USD short-term technical outlook

The EUR/USD pair is posting fresh daily highs in the 1.0520 price zone, and the daily chart shows that the risk is skewed to the upside. The pair keeps developing above all of its moving averages, with the 20 SMA crossing above the 200 SMA, both at around 1.0360. The 100 SMA, in the meantime, grinds higher, far below then at around 1.0055. Finally, technical indicators are directionless, the Momentum just above its 100 level and the RSI near overbought readings.

The 4-hour chart shows that the pair is currently battling to overcome a still bullish 20 SMA while the longer moving averages maintain their upward slopes below the current level. At the same time, technical indicators turned higher within neutral levels, favoring a bullish extension without confirming it.

Support levels: 1.0490 1.0445 1.0400

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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