EUR/USD Forecast: Sentiment pressures the dollar

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2130

US Treasury yields and equities advance ahead of Yellen’s testimony.
The German ZEW survey showed that Economic Sentiment improved in January.
EUR/USD is neutral-to-bullish in the near-term, better chances above 1.2170.

The EUR/USD pair recovered on a better market’s mood, hitting a daily high of 1.2137 and trading nearby ahead of Wall Street’s opening. The dollar weakened as stocks recovered ground and US Treasury yields advanced. Still, there are no fireworks across financial markets, as investors await for Janet Yellen. The former Federal Reserve’s head has been nominated as Treasury Secretary by Joe Biden and will speak before the Senate Finance Committee.

Data coming from Europe was generally encouraging, although still reflecting the effects of the pandemic in economic progress. German inflation was confirmed at -0.3% YoY in December, while the ZEW Survey showed that the Economic Sentiment improved to 61.8 in January from 55 in the previous month. The index for the EU came in at 58.3, improving from 54.4. The US has little to offer, with the focus on Yellen speech.

EUR/USD short-term technical outlook

The EUR/USD pair has recovered from around the 38.2% retracement of its November/January rally at 1.2062 but remains below the next Fibonacci level at 1.2170. Bulls will likely retake control on a break above this last. In the near-term, and according to the 4-hour chart, the bullish potential is limited. The pair has recovered above its 20 SMA but remains below the larger ones, while technical indicators head higher, but within neutral levels.

Support levels: 1.2105 1.2060 1.2020

Resistance levels: 1.2170 1.2225 1.2260

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: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD softens to near 1.3600 as BoE hints further rate cuts

The GBP/USD pair loses ground to near 1.3610 during the early Asian session on Monday. The Pound Sterling softens against the Greenback amid growing expectations of the Bank of England’s interest-rate cut. Traders will take more cues from the Fedspeak later on Monday.

Gold eyes acceptance above $5,000, kicking off a big week

Gold is consolidating the latest uptick at around the $5,000 mark, with buyers gathering pace for a sustained uptrend as a critical week kicks off. All eyes remain on the delayed Nonfarm Payrolls and Consumer Price Index data from the United States due on Wednesday and Friday, respectively.

Top Crypto Gainers: Aster, Decred, and Kaspa rise as selling pressure wanes

Altcoins such as Aster, Decred, and Kaspa are leading the broader cryptocurrency market recovery over the last 24 hours, as Bitcoin holds above $70,000 on Monday, up from the $60,000 dip on Thursday.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.