EUR/USD Analysis: bulls face key resistance around 1.1240
|EUR/USD Current price: 1.1227
- EU Q1 GDP and German April inflation surprised to the upside.
- USD under pressure ahead of Fed's monetary policy meeting this Wednesday.
The EUR/USD pair advanced past 1.1200, as dollar's selling intensified ahead of the US Federal Reserve announcement on monetary policy this Wednesday, also backed by upward surprises in European data. The German GFK Consumer Confidence Survey for May came in unchanged at 10.4, but the preliminary estimate of EU Q1 GDP printed 0.4%, better than the 0.3% expected and above the previous 0.2%, giving signs that the economic slowdown may have receded. German preliminary April inflation was quite strong, up by 2.1% YoY, when harmonized with EU.
The US released Q1 Employment Cost Index, which remained steady at 0.7%. Pending of release are the CB Consumer Confidence Index, and Pending Home Sales. Meanwhile, US equities are poised to open sharply up, skewing the risk in favor of the EUR when it comes to the EUR/USD pair.
The EUR/USD pair is pressuring a daily high of 1.1228 and seems ready to extend its advance. It has surpassed the 50% retracement of its latest daily decline, with the 61.8% retracement of the same slide providing an immediate resistance around 1.1240. In the 4 hours chart, the 100 SMA converges with the Fibonacci resistance, while the 20 SMA turned higher below the current level. Technical indicators continue advancing firmly within positive levels, now nearing overbought territory, although with no signs of exhaustion. Failure at around 1.1240 should be a big warning for bulls.
Support levels: 1.1190 1.1155 1.1110
Resistance levels: 1.1245 1.1280 1.1310
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