EUR/USD: weekly prospects
Authored by Kira Iukhtenko
EUR/USD spent the past week in the sideways $1.3790/3865 channel. The market demand for the euro remains subdued – the currency holds below the April 11 high at $1.3905.
This week we expect the greenback to take over in this battle. The recent strong figures from the US and the persisting expectations of the ECB policy easing are limiting EUR/USD upside. Technically, the 2008-2014 resistance and the top of the monthly Ichimoku still remain a strong barrier for the euro bulls (around $1.3820 as of writing). The next medium-term resistance lies at $1.3965, $1.4000 and $1.4240.
However, the euro buyers won’t give up so easily. The passive ECB remains a supportive factor for now. Evidently, any regulator’s "dovish" words will trigger a mass EUR/USD selloff. Watch the ECB Draghi speaking on Thursday. Technical support for the pair lies at $1.3670, $1.3600 and $1.3475.
In condition of the subdued Easter-related activity we recommend staying out of the market for now. I would recommend selling the euro on a break of the $1.3800/3780 area. A bunch of interesting statistics will be released on Wednesday (EU PMIs, US new home sales) and Thursday (German business confidence, Draghi speech, US labor data).
Chart. Daily EUR/USD