EUR/USD Forecast: Posted A Modest Advance, Still Not Out Of The Woods

EUR/USD Current Price: 1.1917

• US core February inflation contracted to 1.3% YoY, hitting the greenback.
• The ECB is having a monetary policy meeting this Thursday.
• EUR/USD has posted a modest advance, still not out of the woods.

The EUR/USD pair peaked for the day at 1.1924 but trimmed its modest intraday gains to settle around 1.1910 for a second consecutive day. The pair advanced after the US published inflation figures, as the Consumer Price Index came in at 1.7% YoY as expected in February, better than the previous 1.4%. However, core annual inflation resulted at 1.3%, below the previous and the expected 1.4%. Demand for the greenback returned after speculative interest finished digesting the headline, but the American currency remained under pressure as Treasury yields retreated further.

This Thursday, the European Central Bank will announce its latest decision on monetary policy. European policymakers are expected to maintain rates on hold, as well as the PEPP, although the event will include fresh growth and inflation forecasts. Downward revisions are anticipated amid the extended lockdowns in the Union.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is marginally bullish in the near-term, still not out of the woods. The 4-hour chart shows that the price is developing above a bearish 20 SMA, which converges with a Fibonacci level at 1.1885. The Momentum indicator crossed into positive territory but turned flat, while the RSI remains around 46, all of which indicates limited buying interest. The pair would have better chances of advancing once above 1.1920 but will need to recover the 1.1970 threshold to turn bullish.

Support levels: 1.1885 1.1840 1.1790

Resistance levels: 1.1920 1.1970 1.2015

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