The EUR/USD pair is trading higher this Thursday advancing for fourth consecutive day, but with a limited upward momentum, with the common currency underpinned by dollar's weakness rather than gaining on self strength.
View the Live chart of the EUR/USD
The US Federal Reserve decision has left rates unchanged, and despite reaffirming the economy is still growing and showing that concerns over global and financial developments are less worrisome, the market was unable to establish a clear directional trend, either favoring the greenback or against it. But for the most, the market believes that the FED will be able to provide only one rate hike this year, which ends up being generally negative for the USD.
The pair benefited from the BOJ's decision to leave its policy unchanged, which resulted in the USD/JPY plummeting over 200 pips and speculative interest selling the greenback. In the data front, Germany released its April employment figures, showing that unemployment declined more than expected, as the number of people out of work fell by a seasonally adjusted 16,000 to 2.706 million. The unemployment rate, however, remained unchanged at 6.2%.
Later on the day, the US will release its advanced GDP for the first quarter of the year, and the economy is expected to have grew 0.7% compared to an upwardly revised 1.4% in the last quarter of 2015.
From a technical point of view, the pair presents a mild positive tone, as the price is near its weekly high of 1.1367 and above its moving averages, with the 20 SMA heading sharply higher well below the current level in the 4 hours chart. In the same time frame, the technical indicators hold in positive territory, but lacking directional strength. The pair needs to accelerate beyond the 1.1380 region to extend its gains today, with the next short term resistances at 1.1420 and 1.1460.
A strong support is now in the 1.1310/20 region, with a break below it indicating a continued decline down to the 1.1270 region.
Latest updates on the EUR/USD Forecast
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