EUR/USD Price Forecast: Bulls hold the grip as risk aversion prevails

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1738

United States President Donald Trump spoke in the Word Economic Forum in Davos.
European Central Bank President Christine Lagarde is schedule to speak in the American afternoon.
EUR/USD maintains its bullish stance and looks to break higher.

The EUR/USD pair entered consolidation mode on Wednesday, hovering around its daily opening in the 1.1730 prize zone ever since the day started. The US Dollar (USD) remains out of investors’ radar, as the risk-averse sentiment prevails.

Global stocks remain under selling pressure as investors weigh the latest comments from United States (US) President Donald Trump. He argued that Greenland would materially improve US missile defence capabilities and said he expects progress with Europe during discussions in Davos.

President Trump delivered his speech at the World Economic Forum (WEF), pretty much focused on praising his actions to Make America Great Again. Trump claimed inflation has been defeated, and that Europe is not heading into the right drection, subtly referring to the Greenland battle.

Other than that, the macroeconomic calendar had nothing relevant to offer during European trading hours, and will remain light throughout the American session, with no US data but a scheduled speech from European Central Bank (ECB) President Christine Lagarde.

EUR/USD short-term technical outlook

EUR/USD slowly grinds higher, and the 4-hour chart shows it has room to extend its advance. The 20-period Simple Moving Average (SMA) rises yet remains beneath the 100- and 200-period SMAs, while price holds above all three. The 20 SMA at 1.1667 offers relevant dynamic support. At the same time, the Momentum indicator accelerates to the upside, while the Relative Strength Index (RSI) indicator does the same near overbought, hinting at higher highs ahead.

The daily chart for EUR/USD also suggests the pair will continue advancing. The 20-day SMA remains above the 100- and 200-day SMAs, while the pair develops far above them all. The shorter SMA has turned lower, but provided intraday support at around 1.1700, as buyers surged on slides towards it. The 100-day SMA is broadly flat, while the 200-day SMA continues to rise, standing at 1.166 and 1.1590, respectively. Finally, the Momentum indicator is stuck around its midline, while the RSI indicator advances at around 58, reflecting the ongoing consolidation and leaving the door open for additional gains.

(The technical analysis of this story was written with the help of an AI tool.)

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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