EUR/USD Forecast: Sentiment to remain the main market motor in a shortened week

• Easter Holidays and the absence of first-tier data to probably keep the pair in a familiar range.
• Escalating tensions between  China and the US to retain center stage.

The EUR/USD pair remained range-bound around the 1.2300 level for a fourth consecutive week, despite loads of macroeconomic headlines that kept investors on their toes. The so-long awaited Fed's monetary policy, actually brought a rate hike as expected, but any positive effect it could have had on the greenback was offset by the dot plot, showing that policymakers just foresee two more rate hikes for this year, while adding modest upward revisions for the upcoming ones.

Market players quickly forgot the Fed as on Thursday, escalating tensions about a trade war between China and the US dominate the financial world. The White House announced tariffs on $60bn in Chinese imports on alleged technology theft from the Asian country. It didn’t take long until China responded by announcing the country will retaliate and soon after, announced a  plan for tariffs on $3 billion of imports from the US, and also pursue legal action against the country at the World Trade Organization.

Equities tumbled on the news, benefiting safe-haven assets such as the yen, but limiting demand for high-yielding EUR, despite broad dollar's weakness. The upcoming week will be shortened by Easter holidays, and the macroeconomic calendar has little of relevance to offer, which means that currencies will remain depending on sentiment.

EUR/USD technical outlook

Technically, the weekly chart continues presenting a positive bias as the pair managed to post some gains these past days, with the 20 SMA still heading sharply higher far below the current level and above the larger moving averages, as technical indicators advance within positive territory.

The pair, however, was rejected for a third consecutive week from a descendant trend line coming from this year high at 1.2554. In the daily chart, the bullish trend kept losing momentum over these last few days, with the pair tossing and turning around a flat 20 DMA, the Momentum now consolidating below its mid-line, and the RSI also flat, but around 52, leaning the scale toward the downside without confirming it. Another factor that leans the risk toward a bearish extension is that the pair posted a lower low weekly basis, at 1.2239. Below the 1.2300 level that's the next support ahead of a more relevant in the 1.2160 region. If this last is broken, the pair can extend its decline toward 1.2100, a major line in the sand.

To the upside, the trend-line is the first hurdle now in the 1.2350/60 region, followed by the highs set early March around 1.2410. The pair can look a bit more constructive above this last and extend its gains up to 1.2480 a strong static resistance level.

The FXStreet Sentiment Forecast Poll continues reflecting the ongoing market uncertainty, as the dollar is seen mixed against its major rivals, with the EUR up, but the Pound down next week. Commodity-linked currencies are seen strengthening at different paces, with the Aussie being the laggard.

For the EUR/USD pair, the sentiment remains bullish short term, as the pair is seen rising this upcoming week, but turned neutral in the 1-month perspective, from a previous bullish stance. In the 3-month view, the pair is seen bearish, with the number of bears pretty much steady, from 48% to 47%, but with the average target upgraded to 1.2300 from 1.2213.The FXStreet.com Overview chart reflects a moderate hope of higher targets ahead, particularly in the monthly view. In the longer perspective, however, most possible targets remain around 1.2000, rather a sign of the ongoing uncertainty than a probable target.