EUR/USD Forecast: Upside well-limited by sellers aligned around 1.2170/80

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EUR/USD Current Price: 1.2156

  • US Federal Reserve chief Powell said it would take time for the economy to recover.
  • US indexes bounced from daily lows but remain under pressure.
  • EUR/USD is technically neutral-to-bullish, but bulls still hesitate.

The EUR/USD pair advanced to a fresh weekly high of 1.2179 early on Tuesday but was unable to breach the resistance area, retreating afterwards on a modest dollar’s comeback. The greenback maintained its strength until US Federal Reserve chief Jerome Powell testified before Congress. His dovish words pushed the American currency lower, although EUR/USD recovery stalled below the mentioned daily high.

Powell said that it would take time for “substantial further progress” towards the central bank goals on employment and inflation while adding that any change to the bond-buying program will be communicated “well in advance.” Data wise, the EU published the final version of January inflation, which was confirmed at 0.9% YoY. The core annual reading came as previously estimated at 1.4%. In the US, February CB Consumer Confidence jumped to 91.3, better than the expected 90.2.

This Wednesday, Germany will publish the final version of Q4 GDP, seen as previously estimated at 0.1% QoQ. In the US, Fed’s Powell will repeat its testimony before a different committee, usually a low-impact event. The country will publish January New Home Sales.

EUR/USD short-term technical outlook

The EUR/USD pair is trading around 1.2150, gaining bearish strength although without confirming further declines ahead. In the 4-hour chart, the pair is stable above all of its moving averages, with the 20 SMA advancing above the longer ones. Technical indicators have eased to turn flat just above their midlines, reflecting the lack of directional momentum. The pair met sellers in the 1.2170/80 price zone, and only above it, bulls may have a chance.

Support levels: 1.2130 1.2090 1.2050  

Resistance levels: 1.2175 1.2210 1.2250

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