EUR/USD Price Forecast: Bulls taking their chances amid ECB, soft US data

EUR/USD Current price: 1.1428

• United States employment-related data keeps missing expectations.
• The European Central Bank trimmed interest rates by 25 bps as anticipated.
• EUR/USD nears its weekly highs and aims to extend its gains.

The EUR/USD pair spent the first half of the day trading uneventfully a handful of pips above the 1.1400 threshold, consolidating weekly gains ahead of the European Central Bank (ECB) monetary policy decision.

The US Dollar (USD), in the meantime, remained under pressure amid soft United States (US) data released on Wednesday, and persistent global trade tensions. Concerns about US economic progress have been the main theme since President Donald Trump launched his trade war, with the focus now on mounting tensions with Beijing.

Data-wise, the Eurozone (EU) released the April Producer Price Index (PPI), which fell by 2.2% on a monthly basis, and rose by 0.7% from a year earlier. The figures were softer than the previous -1.7% and 1.9% respectively.

The ECB lowered key rates by 25 basis points (bps) as expected. With this decision, the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility stood at 2.15%, 2.4% and 2%, respectively.

Meanwhile, the US published Initial Jobless Claims, which jumped to 247K from the previous 239K, and Q1 Nonfarm Productivity, which fell 1.5%. Unit Labor Cost in the same period increased by 6.6%. Finally, the April Goods and Services Trade Balance, which posted a deficit of $-61.6 billion, much better than the anticipated $-94 billion. Softer than anticipated US employment figures took their toll on the USD, which accelerated its slide across the board.

As American traders reach their desks, ECB President Christine Lagarde kicks off her press conference. Hints on future monetary policy decisions could affect the EUR, but she will likely repeat that policymakers will remain data-dependent and take their decisions meeting by meeting.

EUR/USD short-term technical outlook

The EUR/USD pair trades near an intraday peak at 1.1449, and the daily chart shows the risk remains skewed to the downside, albeit the momentum is still missing. Still, the pair develops above all its moving averages, with the 20 Simple Moving Average (SMA) turning modestly higher at around 1.1290 and well above the longer ones. Technical indicators aim north within positive levels, favoring a bullish extension in the upcoming sessions.

In the near term, and according to the 4-hour chart, EUR/USD is technically bullish. The 20 SMA heads firmly north, providing intraday support, currently at around 1.1410. At the same time, technical indicators rotated north, yet the Momentum indicator remains within neutral levels. Chances are of a continued advance once the pair overcomes the 1.1470 resistance area.

Support levels: 1.1410 1.1375 1.1330

Resistance levels: 1.1460 1.1505 1.1550