EUR/USD Forecast: Holds On To Its Bullish Stance But Needs To Clear The 1.2170 Resistance

EUR/USD Current Price: 1.2156

• The European Central Bank left its monetary policy unchanged, as expected.
• US weekly unemployment claims eased to 900K in the week ended January 15.
• EUR/USD holds on to its bullish stance but needs to clear the 1.2170 resistance.

The EUR/USD pair advanced to 1.2172, within the ECB monetary policy announcement, to stabilize around 1.2150. The shared currency surged on prevalent optimism, and as the European Central Bank maintained its current monetary policy while pledging to keep supporting the economy through the pandemic. President Christine Lagarde confirmed that the stimulus program will continue at least until March 2022, adding that current levels of facilities are good for now.

Data coming from the US was pretty encouraging, as Building Permits rose 4.5% in December, while Housing Starts were up by 5.8%. Initial Jobless Claims contracted to 900K in the week ended January 15, better than the 910K expected. Also, the Philadelphia Fed Manufacturing Survey printed at 26.5, improving from 9.1 and much better than the 12 expected.

This Friday, Markit will publish the preliminary estimates of its January PMIs for the EU and the US. Services output is expected to have fallen further into contraction in the Union, mainly due to the different coronavirus-related restrictions. The US will also publish December Home Sales.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair topped at the 23.6% retracement of its November/January rally, holding on to modest intraday gains. The 4-hour chart shows that the pair is above a bullish 20 SMA, but below the larger ones, which are flat above the mentioned Fibonacci resistance level. The Momentum indicator retreated within positive levels, while the RSI is flat around 57, indicating limited selling interest. Bulls will have better chances on a break above the 1.2170 price zone.

Support levels: 1.2100 1.2060 1.2020  

Resistance levels: 1.2170 1.2225 1.2260

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