EUR/USD Forecast: Consolidative phase extends ahead of ECB, US employment data

EUR/USD Current price: 1.0842

• Eurozone Consumer Confidence improved in March, according to Sentix.
• The European Central Bank will announce its monetary policy decision next Thursday.
• EUR/USD holds on to modest intraday gains, lacks momentum despite a better mood.

The EUR/USD pair trades marginally higher on Monday, hovering around the 1.0850 level ahead of Wall Street’s opening. The market mood is in better shape amid the good performance of Asian shares led by the tech sector, although European indexes lack momentum and trade around their opening levels, leading to some modest gain in US futures.

A data-packed week starts in slow-motion on that front, as the United States (US) macroeconomic calendar will offer no figures,  but there is a scheduled speech from Federal Reserve (Fed) Patrick Timothy Harker, President of the Federal Reserve Bank of Philadelphia. Earlier in the day, the Eurozone published March Sentix Investor Confidence, which improved to -10.5 from -12.9 in February.

In the upcoming days, the focus will shift to the European Central Bank (ECB), due to announce its monetary policy decision next Thursday, and US employment data, as the country will publish the ADP survey on job creation, the JOLTS report and the February Nonfarm Payrolls report.

EUR/USD short-term technical outlook

The EUR/USD pair keeps trading between Fibonacci levels. The upside is being limited by the  38.2% retracement of the 1.1139-1.0694 daily slide at 1.0865, while buyers defend the downside at around the 23.6% retracement at 1.0799.

Technical readings skew the risk to the upside, although the momentum is missing. Technical indicators remain above their midlines but with uneven strength. The Relative Strength Index (RSI) indicator has turned flat and is currently consolidating at around 54, while the Momentum indicator keeps advancing, suggesting absent selling interest. At the same time, all moving averages are directionless and confined to a tight range, just below the current level, in line with the absence of directional strength.

In the near term, and according to the 4-hour chart, EUR/USD is neutral-to-bullish. Moving averages stand directionless below the current level, with the 100 Simple Moving Average (SMA) converging with the mentioned Fibonacci support level. Finally, technical indicators have turned marginally lower, just above their midlines, limiting the odds for a steeper advance.

Support levels: 1.0795 1.0750 1.0700

Resistance levels: 1.0865 1.0910 1.0950