EUR/USD Forecast: Testing the elusive 1.1000 threshold

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0991

Optimism about economic recoveries overshadowed US-China tensions.
US President’s advisor Kudlow said the trade deal with China is intact, for now.
EUR/USD is bullish in the short-term, but speculative interest hesitating ahead of 1.1000.

The EUR/USD pair flirted with the 1.1000 level this Tuesday, as risk-appetite took over the financial world. News that a US biotech firm is starting human tests of a new COVID-19 vaccine coupled with economic reopenings boosted hopes of economic recoveries. After a long weekend, stocks returned with a vengeance posting substantial gains throughout the different sessions. Mounting optimism also lifted US Treasury yields, with the yield on the benchmark 10-year Treasury note reaching an intraday high of 0.71%.

Tensions between the US and China persist but were temporarily set aside. Trump’s advisor Kudlow said that the President is not concerned about the trade deal that’s intact for the moment. He added that Trump’s main concerns are more related to China’s responsibility on the coronavirus spread and Hong Kong.

Germany released the June GFK Consumer Confidence Survey, which came in at -18.9 as expected. The US published the Chicago Fed National Activity Index, which came down to -16.74 in April from -4.97 in March. More relevant, the CB Consumer Confidence edged higher to 86.6 in May from 85.7 in April, missing the market’s expectations. The US will release the Richmond Fed Manufacturing Index for May.

EUR/USD short-term technical outlook

The EUR/USD pair holds on to its intraday gains but was once again unable to storm through the 1.1000 figure, somehow indicating that bulls are not fully convinced. In the short-term, and according to the 4-hour chart, chances are skewed to the upside, as the pair continued to advance after breaking above its 20 SMA. The Momentum indicator keeps heading north well into positive ground, while the RSI indicator has lost its strength, but stands around 68. The pair would need to break above last week’s high at 1.1008 to become more attractive for bulls and be able to extend its advance.

Support levels: 1.0960 1.0925 1.0890

Resistance levels: 1.1010 1.1050 1.1090

View Live Chart for the EUR/USD

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.

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