EUR/USD Forecast: ECB to make it or break it
Another week of Dollar´s suffering comes to an end with the EUR/USD pair up to fresh 2017 highs of 1.1282, compliments to a really weak NFP report, the second in the past three months. The world's largest economy created just 138,000 new jobs in May, well below the 185K and even more disappointing after the strong ADP survey released earlier this week. The unemployment rate came at 4.3%, the lowest in over a decade, but salaries' growth was as usual moderate, far from enough to send the Fed running to raise rates. The report was not bad enough to affect Fed's June decision, and the market still believes that a rate hike is possible this month, but doubts mount on what will happen afterwards.
The upcoming week will bring the ECB monetary policy meeting, and the UK General election, both taking place next Thursday. Hopes that the EU Central Bank could present a hawkish stance have diminished after latest EU CPI data came below expected, backing Draghi's rhetoric on maintaining QE for longer, but still, no one is expecting a dovish stance that anyway will hardly be enough to revert the ongoing trend. Any confident wording, on the other hand, will be quickly seized into the EUR, and send the pair higher.
From a technical point of view, the pair retains its bullish stance, although it's a little worrisome that after what happened this Friday, and with gold, the yen, and even the Swissy running past May highs against the greenback, the EUR/USD pair remains capped below the 1.1300 figure, barely surpassing its previous high by a handful of pips. Still, the weekly chart shows that technical indicators have extended their advances, maintaining their bullish strength near overbought territory, whilst the price keeps advancing beyond its 20 and 100 moving averages. Daily basis, a strongly bullish 20 DMA has once again provided a buying level on pullbacks, now at 1.1130, while the Momentum indicator turned flat within positive territory after correcting overbought conditions, whilst the RSI indicator heads north near overbought readings, all of which supports additional gains ahead.
Beyond 1.1300, the pair can rally up to the 1.1460 region next week, a level that pretty much contained rallies since January 2015. The 1.1200 level is now the immediate relevant support, followed by 1.1120, this week low. Below it, the corrective movement can extend down to 1.1000 without actually affecting the ongoing bullish trend.
Confidence towards the greenback continued to deteriorate, although is still seen recovering in the longer term. The EUR/USD pair is seen averaging 1.1200 this next week, and down to 1.0930 in a three-month view, with 83% of the experts polled by FXStreet favoring such decline. As it happened in previous weeks the average targets are on the rise, which means that most of what the Central Banks are supposed to offer is already priced in.
Another week of Dollar´s suffering comes to an end with the EUR/USD pair up to fresh 2017 highs of 1.1282, compliments to a really weak NFP report, the second in the past three months. The world's largest economy created just 138,000 new jobs in May, well below the 185K and even more disappointing after the strong ADP survey released earlier this week. The unemployment rate came at 4.3%, the lowest in over a decade, but salaries' growth was as usual moderate, far from enough to send the Fed running to raise rates. The report was not bad enough to affect Fed's June decision, and the market still believes that a rate hike is possible this month, but doubts mount on what will happen afterwards.
The upcoming week will bring the ECB monetary policy meeting, and the UK General election, both taking place next Thursday. Hopes that the EU Central Bank could present a hawkish stance have diminished after latest EU CPI data came below expected, backing Draghi's rhetoric on maintaining QE for longer, but still, no one is expecting a dovish stance that anyway will hardly be enough to revert the ongoing trend. Any confident wording, on the other hand, will be quickly seized into the EUR, and send the pair higher.
From a technical point of view, the pair retains its bullish stance, although it's a little worrisome that after what happened this Friday, and with gold, the yen, and even the Swissy running past May highs against the greenback, the EUR/USD pair remains capped below the 1.1300 figure, barely surpassing its previous high by a handful of pips. Still, the weekly chart shows that technical indicators have extended their advances, maintaining their bullish strength near overbought territory, whilst the price keeps advancing beyond its 20 and 100 moving averages. Daily basis, a strongly bullish 20 DMA has once again provided a buying level on pullbacks, now at 1.1130, while the Momentum indicator turned flat within positive territory after correcting overbought conditions, whilst the RSI indicator heads north near overbought readings, all of which supports additional gains ahead.
Beyond 1.1300, the pair can rally up to the 1.1460 region next week, a level that pretty much contained rallies since January 2015. The 1.1200 level is now the immediate relevant support, followed by 1.1120, this week low. Below it, the corrective movement can extend down to 1.1000 without actually affecting the ongoing bullish trend.
Confidence towards the greenback continued to deteriorate, although is still seen recovering in the longer term. The EUR/USD pair is seen averaging 1.1200 this next week, and down to 1.0930 in a three-month view, with 83% of the experts polled by FXStreet favoring such decline. As it happened in previous weeks the average targets are on the rise, which means that most of what the Central Banks are supposed to offer is already priced in.
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