EUR/USD Forecast: Trading At A One-Month High And Poised To Extend Its Advance

EUR/USD Current Price: 1.1862

• Progress in talks about a US stimulus package kept the greenback in sell-off mode.
• EU Consumer Confidence expected to have deteriorated further in October.
• EUR/USD is trading at a one-month high and poised to extend its advance.

Speculative interest kept selling the greenback this Wednesday, amid reports of progress in a US stimulus package. Following talks late on Tuesday, House Speaker Nancy Pelosi and US Treasury Secretary Steven Mnuchin sounded confident over clinching a deal, and announced they would continue talks. On a down note, it seems unlikely that a large bill will pass the Republican Senate. The EUR/USD pair traded as high as 1.1880 and holds nearby as the US session comes to an end. Stocks, however, remained under pressure. European indexes closed with substantial losses, dragging Wall Street lower.  

Meanwhile, the number of new coronavirus cases in Europe kept recording fresh highs, although the market seems to be ignoring the issue. The macroeconomic calendar didn’t have relevant figures to offer but will become more interesting this Thursday. The EU will publish the preliminary estimate of October Consumer Confidence, foreseen at -15 from -13.9 previously. The US, on the other hand, will release Initial Jobless Claims for the week ended October 16, and September Existing Home Sales.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is holding near its monthly high, overbought but bullish in the near-term. The 4-hour chart shows that it has been developing above all of its moving averages, with the 20 SMA heading north above the larger ones. Technical indicators, in the meantime,  stand within overbought readings, partially losing their bullish strength. Overall, the risk remains skewed to the upside, with room for additional gains once above 1.1915, now the immediate resistance level.

Support levels: 1.1830 1.1780 1.1740

Resistance levels:  1.1915 1.1950 1.1990

View Live Chart for the EUR/USD

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