EUR/USD Forecast: Bullish In The Short-Term But Still Needs To Overcome The 1.1830 Resistance Level

EUR/USD Current Price: 1.1786

• Risk-appetite backed the shared currency despite discouraging EU data.
• US inflation beat the market’s expectations in July, core CPI reached 1.6% YoY.
• EUR/USD is bullish in the short-term but still needs to overcome the 1.1830 resistance level.

The EUR/USD pair posted its third consecutive daily high this Wednesday at 1.1816, ending the day with gains in the 1.1790 price zone. The greenback gave up to high-yielding demand, as global equities edged higher this Wednesday. The market keeps ignoring the fact that US lawmakers are still unable to reach an agreement on the next coronavirus aid package, feeling comfortable with Trump’s executive orders on the matter.

The shared currency rallied despite EU data disappointed. According to the official release, June Industrial Production improved by less than anticipated, printing at -12.3% YoY vs the previous -20.4%. Monthly basis, production increased by 9.1%, below the previous 12.3% and the expected 10%. The US, on the other hand, published July inflation data. The monthly consumer price index was up 0.6% in the month, matching the previous month reading and beating expectations of 0.3%. Yearly basis, the CPI was up 1%, while the core yearly reading printed at 1.6%, both beating expectations. This Thursday, Germany will publish July inflation, foreseen at -0.5% YoY, while the US will unveil weekly unemployment figures.

EUR/USD short-term technical outlook

The EUR/USD pair is trading just below the 1.1800 level, modestly bullish in the short-term. The 4-hour chart shows that it has managed to advance above a bearish 20 SMA, while the 100 SMA continues advancing below it. The Momentum indicator entered positive ground, maintaining a modest bullish slope, while the RSI hovers around 53. The risk is skewed to the upside, although further gains will seem more likely on a break above 1.1830, the immediate resistance level.

Support levels: 1.1740 1.1690 1.1650

Resistance levels: 1.1830 1.1870 1.1915

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