EUR/USD Forecast: Bulls lead ahead of US critical events

EUR/USD Current Price: 1.1706

  • Optimism prevails despite mounting coronavirus-related concerns in Europe.
  • US presidential debate and several Fed’s speakers in the spotlight.
  • EUR/USD is mildly bullish in the short-term, critical Fibonacci resistance level at 1.1712.

The EUR/USD pair retook the 1.1700 during European trading hours, extending its corrective advance. The greenback eases against most of its major rivals as the market’s mood is still positive, amid a bit cautious ahead of US developments. Equities were up in Asia, but European indexes were unable to hold on to early gains, trading below their opening levels. The risk-on sentiment finds support in renewed hopes of a US coronavirus aid-package, and increased chances of a Brexit trade deal. On a down note, the UK and Germany, among other  European countries, are studying more restrictions to contain coronavirus contagions.

Earlier today, the EU published the September Economic Sentiment Indicator, which improved to 91.1 from 87.5 in the previous month. Germany released the preliminary estimate of September inflation, which was worse than anticipated, printing at -0.2% YoY. As for the US, the country has just published the August Goods Trade Balance, which showed that the deficit was of $-82.94B, worse than the previous $-80.11B. Later today, the focus will be on the US CB Consumer Confidence and several Fed’s speakers, ahead of the first US presidential debate.

EUR/USD short-term technical outlook

So far, the EUR/USD pair has reached a daily high of 1.1714, stalling its recovery around the 38.2% retracement of the latest daily decline, measured between 1.1871 and 1.1611. From a technical point of view, the risk is skewed to the upside, as, in the 4-hour chart, technical indicators advance within positive levels. Even further, the 20 SMA has lost its bearish strength below the current level, although the 100 SMA maintains its bearish slope around 1.1780. An advance beyond the daily high should favor an extension towards the mentioned 1.1780 price zone, mainly if the sentiment improves during US trading hours.

Support levels: 1.1670 1.1625 1.1590

Resistance levels: 1.1715 1.1760 1.1800

View Live Chart for the EUR/USD

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