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EUR/USD Forecast: Could Extend Its Advance On A Break Above The 1.2170/80 Price Zone

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EUR/USD Forecast: Could Extend Its Advance On A Break Above The 1.2170/80 Price Zone

EUR/USD Current Price: 1.2129

  • US inflation was confirmed at 1.4% YoY in January, missing expectations.
  • US equities plunged after reaching record highs, remained in the red.
  • EUR/USD could extend its advance on a break above the 1.2170/80 price zone.

The greenback continued to shed ground against most major rivals, resulting in EUR/USD reaching a fresh weekly high of 1.2143. Poor US inflation maintained the pressure throughout the American session, with the pair ending the day in the 1.2130 region. US January annual inflation came in at 1.4%, matching the preliminary estimate but below the expected 1.5%. Earlier in the day, Germany published its own January CPI data, which matched the preliminary estimates.

Meanwhile, Wall Street rallied to fresh record highs ahead of the opening, but indexes plunged afterwards, ending the day with modest losses. There was no particular catalyst for the intraday plunge, and currency pairs didn’t react to the movement. US Treasury yields eased just modestly amid soft US inflation figures. This Thursday, the macroeconomic calendar will have little to offer. Germany will release the January Wholesale Price Index while the US will publish Initial Jobless Claims for the week ended February 5.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading below a strong static resistance area, formed by the 236% retracement of its November/January rally and multiple intraday peaks, between 1.2170/80. The bullish potential will increase on a break above the level. The 4-hour chart shows that the pair is above its 20 and 100 SMAs, with the shorter one advancing below the longer one. Technical indicators lack directional strength but hold on to overbought readings. Overall, the risk remains skewed to the upside, although a steeper advance will be likely only with a break of the mentioned resistance area.

Support levels: 1.1970 1.1925 1.1885

Resistance levels: 1.2170 1.2215 1.2260

View Live Chart for the EUR/USD

 

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Posted-In: EUR/USD FXStreetNews Eurozone Forex Global Markets

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