EUR/USD holds 20-day MA support despite upbeat Powell

EUR/USD's defense of 20-day MA despite upbeat Powell has raised hopes of positive action ahead of the weekend.
Yield differential holds at multi-decade highs, favors USD rally.
No first tier data due in Europe, US.

Omkar Godbole FXStreet Contributor

The EUR/USD could see positive action on the last trading day of the week, having defended the key 20-day moving average (MA) support on Thursday.

Fed's Powell, during a radio interview yesterday, said the US economy is in a "really good place" and added good times will likely last for three years, courtesy of government tax and spending programs. Powell's positive comments indicated the central bank is not particularly concerned about Trump's trade war and will likely stick to its plan of raising rates at a faster pace.

Still, the greenback failed to pick up a strong bid, allowing the EUR/USD to hold the 20-day MA support, currently seen at 1.1654. At press time, the currency pair is trading at 1.1665.

The pair's defense of the key MA support despite positive comments from Fed's Powell could entice technical buyers, creating upward pressure on the EUR exchange rate.

Further, the data calendar is light and the oversold Chinese Yuan is showing signs of life against the US dollar. Hence, there is enough room for a minor technical rally in the common currency.

EUR/USD Technical Outlook

The pair created a doji candle at the 20-day MA support yesterday. A close today above 1.1696 (previous day's doji candle high) would confirm the pullback from the recent high of 1.1791 has ended and would open the doors to 1.1852 (June 14 high).

On the downside, a close below the 20-day MA of 1.1654 would open up downside towards 1.1541 (lower Bollinger band - Std.Dev of +2,-2 on 20-day MA). A violation there would expose the June 21 low of 1.1508.

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	High
1H	Strongly Bearish	Neutral	Shrinking
4H	Bearish	Oversold	Expanding
1D	Strongly Bearish	Neutral	Low
1W	Bearish	Neutral	High
Updated Jul 13, 04:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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