EUR/USD Price Forecast: Bullish bias remains while above 1.1700, 100-SMA on H4
- EUR/USD struggles to capitalize on a modest bullish gap led by the US-EU trade deal.
- The technical setup backs the case for the emergence of dip-buying amid a softer USD.
- Traders, however, might opt to wait for the outcome of a two-day FOMC meeting.
The EUR/USD pair kicks off the new week on a positive note and climbs to the 1.1770 area during the Asian session in reaction to the optimism over a trade deal between the US and the European Union (EU). Spot prices, however, struggle to capitalize on the strength as traders opt to move to the sidelines ahead of the crucial two-day FOMC meeting starting Tuesday and key US macro releases this week.
From a technical perspective, the EUR/USD pair is holding above the 100-period Simple Moving Average (SMA) pivotal point on the 4-hour chart. Moreover, positive oscillators on the daily/hourly charts back the case for some meaningful appreciating move. However, it will be prudent to wait for a sustained move beyond the daily swing high, around the 1.1770 region, before placing fresh bullish bets.
The EUR/USD pair might then surpass the 1.1800 round figure and extend the positive momentum further towards the 1.1830 area, or the highest level since September 2021, touched earlier this month, en route to the 1.1900 round figure. A sustained strength beyond the latter would set the stage for an extension of a well-established uptrend from the year-to-date low, around the 1.0180-1.0175 region set in January.
On the flip side, the 100-period SMA on the 4-hour, currently pegged near the 1.1700 mark, is likely to protect the immediate downside. Any further slide could be seen as a buying opportunity near the 1.1640 support zone, which should limit losses for the EUR/USD pair near the 1.1600 round figure. A convincing break below the latter could make spot prices vulnerable to retest the monthly low, around the 1.1560-1.1555 area.
Some follow-through selling might expose the 1.1500 psychological mark before the EUR/USD pair extends the downfall further towards the 1.1455-1.1450 zone and the 1.1400 round figure.
EUR/USD 4-hour chart
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The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
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