EUR/USD Price Forecast: Green light to extra gains near-term

EUR/USD extends the upside bolstered by an upbeat ECB.
The resumption of the bullish move initially targets 1.1965.

Pablo Piovano FXStreet

EUR/USD extends its march north to the upper-1.1800s bolstered by an improvement in the sentiment surrounding the European currency after the ECB event on Thursday.

In fact, recent gains in the single currency appeared somewhat “justified” in the latest message from the ECB after its President C.Lagarde suggested that markets should not overreact to the recent appreciation of the exchange rate. These comments from Lagarde practically dissipated any concerns regarding the strength of the euro, particularly in response to comments from ECB’s P.Lane last week.

While market participants are expected to continue digesting the ECB event, several ECB-speakers are due to speak at the end of the week, keeping the attention well on the euro at the same time. On the USD-side, investors will closely follow the release of the CPI figures for the month of August later in the NA session.

Near-term Technical Outlook

The continuation of the bullish impetus around EUR/USD could see the pair initially revisiting the August’s peak at 1.1965 ahead of another attempt to test the so far 2020 tops beyond 1.20 the figure (September 1). The RSI is navigating the 55-60 band, so there is enough room for the pair to attempt a move higher without entering into the overbought territory. On the downside, if recent lows in the mid-1.1700s are cleared on a convincing fashion, then the key contention area around 1.1700 could be exposed.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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