EUR/USD Price Forecast: Higher highs likely in the near term

EUR/USD Current price: 1.1358

• United States Retail Sales rose by 1.4% in March, beating expectations.
• Renewed tensions between China and the US undermine the mood.
• EUR/USD extends its consolidative phase, the risk skews to the upside.

The EUR/USD pair remains stable above the 1.1300 mark on Wednesday, with financial markets resuming cautious trading amid scarce macroeconomic releases and fresh news in the trade-war front.

United States (US) President Donald Trump signed an order directing Commerce Secretary Howard Lutnick to begin a national security review on Tuesday to study potential new tariffs on all US critical minerals imports. The news fueled concerns as  China is a top global producer of 30 of the 50 minerals considered critical by the US Geological Survey, for example, and has been curtailing exports in recent months, according to Reuters.

As a result, stock markets trade with a soft tone, reflecting the dismal mood. Nevertheless, the US Dollar (USD) remains unattractive as a safe-haven, with speculative interest rather looking at Gold, which reached fresh record highs during European trading hours.

Data-wise, the Eurozone (EU) confirmed that the Harmonized Index of Consumer Prices (HICP)  rose at an annualized pace of 2.2% in March, while up 0.6% in the month. Across the pond, the US reported that March Retail Sales were up 1.4%  in March, better than the 1.3% expected. The American afternoon will feature a speech from Federal Reserve (Fed) Chairman Jerome Powell.

EUR/USD short-term technical outlook

The EUR/USD pair is up on the day, but still trading within familiar levels. The risk remains skewed to the upside, as the daily chart shows that technical indicators hold at extreme overbought levels, although lacking clear directional strength. At the same time, EUR/USD develops far above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) advancing above the 100 and 200 SMAs, which gain upward strength. The 20 SMA stands at around 1.0970, too far away to be relevant as support, yet signaling buyers’ dominance.

In the near term, and according to the 4-hour chart, the EUR/USD pair is neutral. The pair is resting on a flat 20 SMA, the latter a few pips below the current level. The 100 and 200 SMAs maintain their bullish slope far below the current level, in line with the dominant bullish trend. Finally, technical indicators head modestly lower, with the Momentum indicator just below its 100 line, not enough to confirm an upcoming leg lower.

 Support levels: 1.1310 1.1285 1.1240

Resistance levels: 1.1375 1.1425 1.1470