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EUR/USD Forecast: Neutral-To-Bullish In The Near Term, Dips Are Seen As Buying Opportunities

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Valeria Bednarik - Chief Analyst at FXStreet
·2 min read
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EUR/USD Current Price: 1.2131

  • Investors’ optimism about a US stimulus package and covid immunization weighed on the dollar.

  • A scarce macroeconomic calendar and a US holiday maintained the pair ranging.

  • EUR/USD neutral-to-bullish in the near term, dips are seen as buying opportunities.

Dull trading extended into the weekly opening, amid holidays in China and the US, although the risk-related sentiment was upbeat, as investors are hoping US Senators will come with a new stimulus bill by the end of the month. Also, the number of coronavirus contagions in countries where vaccine immunization is high has decreased, further boosting expectations of an economic comeback in the near future. The EUR/USD pair remained within familiar levels, peaking for the day at 1.2144.

The EU published the December Trade Balance, which posted a seasonally adjusted surplus of €29.2 billion, better than anticipated. However, Industrial Production in the same month fell 1.6% MoM, and came at -0.8% YoY, missing the market’s expectations.

This Tuesday, the focus will be on the German ZEW survey. The Economic Sentiment in Germany and the EU is expected to have worsened in February. The EU will release a revision of its Q4 GDP, foreseen unchanged at -0.7% quarterly basis. The US will publish the February NY Empire State Manufacturing index, and TIC Flows for December.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is unchanged for a fourth consecutive day around 1.2130, neutral in the near-term. In the 4-hour chart, the pair remains trapped between its 100 and 200 SMAs, which lack directional strength, while technical indicators keep hovering around their midlines. Meanwhile, the pair remains below the 23.6% retracement of its November/January rally in the 1.2170 price zone, the area to surpass to gain bullish traction.

Support levels: 1.2100 1.2065 1.2020

Resistance levels: 1.2175 1.2215 1.2260

View Live Chart for the EUR/USD

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