EUR/USD Forecast: Mounting near-term bullish pressure

EUR/USD Current price: 1.0799

• Market players await the release of the US Consumer Price Index on Wednesday.
• Federal Reserve speakers stand out in the American session.
• EUR/USD is poised to extend its advance in the near term, although volatility is limited.

The EUR/USD pair holds on to familiar levels, trading in a tight range just below the 1.0800 mark. Major currency pairs still struggle for direction amid the absence of fresh clues. Central banks have held their monetary policies on hold for longer than anticipated, as inflation refuses to come down to match policymakers’ goals, while the different employment sectors remain relatively tight.

 Investors will try to get answers from upcoming United States (US) data, as the country will release the April Consumer Price Index (CPI) on Wednesday. The Federal Reserve (Fed) prefers to base its decision on another inflation measure,  the Personal Consumption Expenditures (PCE) Price Index, but the CPI usually triggers interesting market reactions. In the meantime, the US Dollar trades with a soft tone against most major rivals, but price action seems contained.

Data-wise, Germany published a minor figure, the March Current Account, which posted a non-seasonally adjusted surplus of €27.6 billion, slightly below the February reading. The US session will bring multiple Fed officials’ speakers, who have lately had no relevant effect on the USD price.

EUR/USD short-term technical outlook

From a technical point of view, the risk skews to the upside, although additional gains are still unclear. The daily chart for the EUR/USD pair shows it is battling to overcome a mildly bearish 200 Simple Moving Average (SMA), while the 100 SMA provides resistance around 1.0840. The 20 SMA, in the meantime, aims north below the current level, reflecting increased buying interest. Finally, technical indicators hold within positive territory, although lacking clear directional strength.

According to the 4-hour chart, another leg north seems likely in the near term, particularly if EUR/USD breaks through 1.0810, the immediate resistance level. The pair is developing above all its moving averages, with the 20 SMA gaining bullish traction above the longer ones. Furthermore, technical indicators picked up momentum within positive levels, in line with an upward continuation.

Support levels: 1.0750 1.0695 1.0660  

Resistance levels: 1.0810 1.0840 1.0885