EUR/USD Forecast: Neutral In The Near-Term, Faces Strong Resistance In The 1.2180 Region

EUR/USD Forecast: Neutral In The Near-Term, Faces Strong Resistance In The 1.2180 Region

EUR/USD Current Price: 1.2160

  • The ECB expressed concerns about the exchange rate, will analyse the impact of policies’ imbalances.
  • US Consumer Confidence improved modestly in January to 89.3.
  • EUR/USD is neutral in the near-term, faces strong resistance in the 1.2180 region.

A better market sent EUR/USD to a daily high of 1.2175. However, investors remain cautious ahead of first-tier events in the US to be released later in the week, and doubts about further US stimulus, as President Joe Biden’s plan faces opposition in Congress.  Also, concerns gyrate around delays in vaccines’ delivery in Europe. The market mood suffered a setback mid-US afternoon, after the ECB expressed concerns about the exchange rate, and would study the impact of ECB vs Fed policy on it.

Data wise, the EU macroeconomic calendar remained empty, while the US published the Conference Board Consumer Confidence Index, which improved in January to 89.3, slightly better than anticipated. On Wednesday, Germany will publish the February GFK Consumer Confidence Survey, foreseen at -7.9 from -7.3 in the previous month. The US will release December Durable Goods Orders, seen advancing a modest 0.9%. Finally, the US Federal Reserve will unveil its latest decision on monetary policy during the American afternoon, although it is widely anticipated to remain on-hold.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading in the 1.2160 price zone ahead of the Asian opening, holding on to gains buy with the bullish potential well-limited. It met sellers around the 23.6% retracement of its November/January advance at 1.2170. The 4-hour chart shows that the price is stuck around a mildly bullish 20 SMA, but below the larger ones, which turn lower a few pips above the Fibonacci resistance level. Technical indicators are flat within neutral levels, reflecting the limited buying interest.

Support levels: 1.2100 1.2060 1.2025

Resistance levels: 1.2180 1.2225 1.2260

View Live Chart for the EUR/USD

Posted In: EUR/USDFXStreetNewsEurozoneForexGlobalMarkets