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EUR/USD Forecast: Bullish, Next Critical Resistance At 1.1180, A Relevant Fibonacci Level

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EUR/USD Current Price: 1.1152

  • US-China  “comprehensive” trade deal didn’t trigger any market reaction.
  • Wall Street surged to all-time highs, pulled back ahead of the close.
  • EUR/USD bullish, next critical resistance at 1.1180, a relevant Fibonacci level.

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Speculative interest continued to move away from the greenback this Wednesday, with the EUR/USD pair surging to 1.1163, a fresh weekly high. Risk-related sentiment, related to trade and growth, lead the way throughout the way. The dollar was mildly stronger at the beginning of the day, amid speculation phase one of the trade deal will fell short of boosting global growth. However, the mood improved with the US session and Wall Street running to all-time highs, after US Treasury Secretary Mnuchin said that China has agreed to put together very significant laws to follow through on its commitments and there will be additional tariff rollbacks in phase two of the trade deal.

The phase one of the trade deal signing ceremony saw US President Trump taking his time to criticize the Fed, in the middle of the announcement. Among other things, he announced that tariffs would be removed if they agree on a phase two deal, adding that the deal is much more comprehensive than just agricultural buying. The market didn’t react to the news, and in fact, US indexes pulled back from their intraday highs.

This Thursday, Germany will release the final version of December inflation, foreseen at 1.5% YoY. The US, on the other hand, will publish December Retail Sales seen posting a modest 0.3% monthly gain. Later in the day, ECB’s President, Christine Lagarde, will offer a speech.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair recovered half its latest daily losses, trading around the 50% retracement of the daily slide measured between 1.1238 and 1.1084. The short-term picture favors additional gains, as the pair has managed to advance above all of its moving averages, which anyway continue to lack directional strength, while technical indicators continue to head north within positive ground. The pair would need to rally past 1.1180, the 61.8% retracement of the mentioned decline, to confirm an upward extension during the upcoming hours.

Image Sourced from Pixabay

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About Valeria Bednarik

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