EUR/USD Forecast: Bulls cautiously adding longs

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0765

German inflation rose less than anticipated in January, up by 9.2% YoY.
Easing Treasury yields and the positive tone of equities undermined demand for the USD.
EUR/USD grinds higher and approaches its weekly high at 1.0798.

The EUR/USD pair recovered ground on Thursday and trades in the 1.0760 price zone ahead of the US opening after hitting an intraday high of 1.0777. A better market mood alongside sliding US Treasury yields undermined US dollar demand.

Softer-than-anticipated German inflation figures triggered a short-lived knee-jerk as the Harmonized Index of Consumer Prices (HICP) unexpectedly rose by 9.2% YoY in January, below the 10% expected and easing from the previous 9.6%. On the one hand, easing inflationary pressures are welcomed news, yet on the other, it means the European Central Bank (ECB) can decelerate the pace of tightening.

Also, European Central Bank (ECB) member and Bank of France head Francois Villeroy de Galhau hit the wires and said that, as of today, he thinks he can exclude a recession in the French economy. His words provided additional support to the Euro.

The United States will publish Initial Jobless Claims for the week ended February 3, foreseen at 190K, with no other relevant figures scheduled for today.

EUR/USD short-term technical outlook

The EUR/USD pair trades below its weekly high of 1.0798 achieved on Monday, and a handful of pips above a relevant Fibonacci level, the 61.8% retracement of the 2022 yearly slide. Technical indicators have pared their declines and turned marginally higher, although they lack enough strength while holding within negative levels. At the same time, the 20 Simple Moving Average (SMA) gains downward traction above the current level, while the longer ones stand far below the current level. Overall, chances of a steeper advance remain limited.

The 4-hour chart offers a neutral stance, also reflecting bulls’ desire to return. Technical indicators remain directionless around their midlines, while the price is currently hovering around a flat 200 SMA. The 20 SMA, in the meantime, remains below the current level, although also unable to provide directional clues. Bulls may take their chances if the pair extends the current recovery beyond the 1.0800 threshold.

Support levels: 1.0745 1.0700 1.0660

Resistance levels: 1.0795 1.0840 1.0845

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.