EUR / USD Current price: 1.1915
- The ECB may start cutting back on bond purchases in the summer.
- US jobless claims rose unexpectedly in the week ending April 2.
- EUR / USD has room to rally above 1.2000.
The US dollar was again the weakest, with the result that the EUR / USD pair reached a new two-week high of 1.1927. The dollar accelerated its decline when the head of the US Federal Reserve, Jerome Powell, spoke at an IMF seminar. Powell didn’t add much to what the market already knew, but his dovish words put pressure on Treasury yields, which remain at the bottom of their weekly range.
On the other hand, Robert Holzmann, chairman of the Austrian Central Bank, said the European Central Bank could possibly start cutting its bond purchases in the summer, supporting the common currency.
Germany posted February factory orders, which rose 1.2% MoM and 5.6% YoY, much better than January. The EU published the February producer price index, which amounted to 1.5% y / y. The number of initial applications for unemployment benefits in the US for the week ended April 2, amounted to 744 thousand, which is lower than expected 680 thousand and 728 thousand earlier. Germany is to release February industrial production and trade balance for the same month on Friday. The US is to publish PPI data for February only.
Short-term technical forecast of EUR / USD
The EUR / USD pair is trading near the aforementioned daily high with the likelihood of continued growth. The 4-hour chart shows that price is struggling with the moderately bearish 200 SMA, while it remains above the firmly bullish 20 SMA, which has crossed above the 100 SMA. Technical indicators lack directional strength, but momentum remains well above the centerline while the RSI is consolidating at 76. The March 22 high of 1.1946 is the closest resistance, with a break above it encouraging expansion beyond 1.2000.
Support levels: 1.1890 1.1840 1.1795
Resistance levels: 1.1945 1.1995 1.2040
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