EUR/USD Forecast: Mixed US data weighing on the pair

EUR/USD Current price: 1.0927

• United States Retail Sales rose less than anticipated in February, wholesale prices up.
• European Central Bank member Philip Lane hinted at a June decision on rate cuts.
• EUR/USD under mild pressure near the 1.0917 Fibonacci support level.

The EUR/USD pair kept trading uneventfully around the 1.0940 figure throughout the first half of Thursday as investors struggled to find a directional catalyst. Wall Street closed mixed, leading to limited action in Asian stock markets. European indexes developed in a better fashion, maintaining the mood up and EUR/USD underpinned ahead of United States (US) macroeconomic data.

Meanwhile, European Central Bank (ECB) chief economist Philip Lane said policymakers would have a clearer view of progress on disinflation by the time they meet in June, adding they would need to take their time to get rate cuts right. Lane also noted that wages are moving in the right direction but added they need to see real incomes improve and firms absorb a “fair amount of that in lower profits.”

A packed US macroeconomic calendar pushed EUR/USD lower. The country published Initial Jobless Claims for the week ended March 8, which declined to 209K, better than the 218K expected. Additionally, the February Producer Price Index (PPI) rose 1.6% YoY in February, higher than the previous 1% and above the expected 1.1%. Finally, Retail Sales were up 0.6% in the same month, missing the 0.8% anticipated by market players, although better than the previous -1.1%.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of falling further, particularly if it pierces the immediate Fibonacci support level at 1.0917. The 50% retracement of the 1.1139/1.0694 slide attracted buyers since March 8, while the 61.8% retracement provides resistance at 1.0970. In the daily chart, the pair keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) crossing above the longer ones, although all of them are confined to a tight 30 pips range. Finally, technical indicators turned south, but lack enough strength to confirm an upcoming side while holding within positive levels.

The bearish case is gaining strength in the near term, and according to the 4-hour chart. EUR/USD currently struggles to hold above a flat 20 SMA while the longer moving averages remain far below the current level. Technical indicators, however, gain bearish traction within neutral levels, reflecting increased buying interest.

Support levels: 1.0915 1.0865 1.0820

Resistance levels: 1.0970 1.1010 1.1045