EUR/USD Forecast – Euro Looks Primed for Gains Vs US Dollar
- – The Euro bounced sharply this week against the US Dollar, and traded above 1.0700.
- – There is a major bullish trend line with support at 1.0690 formed on the hourly chart of EUR/USD.
- – Earlier today, the Euro Zone CPI released by the Eurostat for March 2017 (YoY) posted a rise of 1.5%.
Euro Zone CPI
Today in the Euro Zone, the Consumer Price Index for March 2017 was released by the Eurostat. The market was positioned for the price of goods and services to increase by 1.5% in March 2017, compared with the same month a year ago.
The outcome was in line with the forecast, as the Euro Zone CPI increased 1.5%. In terms of the monthly change, the CPI rose 0.8%, which was a lot more than the last +0.4%. The report added that the “lowest annual rates were registered in Romania (0.4%), Ireland and the Netherlands (both 0.6%). The highest annual rates were recorded in Latvia (3.3%), Lithuania (3.2%) and Estonia (3.0%). Compared with February 2017, annual inflation fell in seventeen Member States, remained stable in six and rose in five“.
Overall, the result was positive, and may help the EUR/USD in trading above the 1.0700 handle in the near term.
EUR/USD Technical Analysis
The Euro started a decent recovery after finding buyers around the 1.0610 and 1.0620 support levels against the US Dollar. The EUR/USD bounced back and moved above the 1.0670 resistance area. There was even a break above the 1.236 extension of the last wave from the 1.0677 high to 1.0602 low.
The pair recently traded as high as 1.0736 where it faced resistance and currently moving lower. An initial support is around the 23.6% Fib retracement level of the last wave from the 1.0634 low to 1.0736 high. Moreover, there is a major bullish trend line with support at 1.0690 formed on the hourly chart.
The same trend line also coincides with the 50% Fib retracement level of the last wave from the 1.0634 low to 1.0736 high. So, if the pair corrects lower in the near term, it is likely to find support around the 1.0680 and 1.0670 levels.
