EUR/USD Forecast: Trading at daily highs, bullish potential limited

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1117

German ZEW Survey came in much better than anticipated in January.
European equities bouncing from daily lows, still in the red.
EUR/USD trading higher could recover up to 1.1145.

The EUR/USD pair is advancing this Tuesday, having peaked for the day at 1.1118 during London trading hours. The shared currency found support in an upbeat German ZEW Survey, which showed that the Economic Sentiment in the country improved to 26.7 in January, much better than the 15 expected. The Current Situation for the country came in at -9.5, better than the -13.5 expected and the previous -19.9. For the EU, the survey shows that sentiment improved to25.6 largely surpassing the 5.5 forecast.

In the meantime, Asian and European indexes trade in the red, although the latest are bouncing from intraday lows as the sour sentiment eases. Plummeting commodities are adding to the negative tone of equities, alongside news indicating a virus outbreak in China that can be spread between humans.

The US won’t release relevant data this Tuesday, although it will auction some short-term bonds during the American afternoon.

EUR/USD short-term technical outlook

The EUR/USD pair is holding near its daily highs ahead of Wall Street’s opening, struggling with a daily ascendant trend line coming from November 29 low, which broke lower at the end of last week. The 4-hour chart shows that the 20 SMA heads lower, converging with the mentioned trend line at around 1.1110. Technical indicators, in the meantime, head firmly higher, but within negative levels. The pair could extend its recovery up to 1.1145, the immediate resistance, but further gains are still unclear.

Support levels: 1.1100 1.1065 1.1020

Resistance levels: 1.1145 1.1180 1.1120

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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