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EUR/USD Forecast: Turned Short-Term Bullish May Near The Critical 1.1000 Level

Valeria Bednarik - Chief Analyst at FXStreet

EUR/USD Current Price: 1.0905

  • US Federal Reserve Powell said the central bank has not run out of armament.
  • German’s Merkel and France’s Macron proposed a rescue plan for the EU.
  • EUR/USD turned short-term bullish may near the critical 1.1000 level.

Rallying equities led the way higher for EUR/USD, throughout the first half of the day, later boosted by news indicating that Germany and France have proposed an EU recovery fund of  E500 billion. According to the German’s Chancellor Merkel, the fund should give grants, no loans to member states, while France’s Macron said it would focus on help countries or regions that have been particularly affected by the coronavirus outbreak. The pair hit a daily high of 1.0919, ending it above the 1.0900 level. Earlier in the day, stocks advanced on a mixture of optimistic coronavirus-related news and US Federal Reserve chief’s Powell hinting more easing coming.

Moderna, a biotech firm, has announced encouraging results on an early-stage coronavirus vaccine trial. The next and final stage of the test could be completed by July. Hopes on economic recoveries boosted appetite for riskier assets. This Tuesday, Germany will release the ZEW Survey on Economic Sentiment for May, seen improving in the country from 29.2 to 33.5. For the whole Union, the indicator is seen at -12.1 from 25.2 in April.

EUR/USD Short-Term Technical Outlook

The EUR/USD is trading at its highest in almost two weeks, holding on to its bullish potential in the short-term. The 4-hour chart shows that it has accelerated north through all of its moving averages, which remain directionless. Anyway, the sharp buying volume skews the risk to the upside. In the mentioned chart, technical indicators head firmly higher well into positive ground, nearing overbought levels. As long as buyers defend the downside around 1.0890, the pair has chances of nearing the 1.1000 critical threshold.

Support levels:  1.0890 1.0860 1.0820

Resistance levels: 1.0920 1.0950 1.0985

Image sourced from Pixabay

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