EUR / USD forecast: next barrier at 1.1380

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EUR / USD Current price: 1.1349

  • The dollar fell slightly despite the rise in US Treasury yields.
  • Concerns about the Omicron variant of the coronavirus continue to dampen the mood.
  • EUR / USD is slightly bullish in the short term, facing Fibonacci resistance at 1.1380.

EUR / USD hit an intraday high of 1.1345, holding close, heading towards the Asian open. The shared currency rallied against the greenback, despite the gloomy market mood and rising US government bond yields. The US dollar is generally down, although the losses are uneven. The EUR and AUD are the best performers, while the GBP is among the worst.

Speculative interest doesn’t pay much attention to US government bond yields which have hit new weekly highs. Inflation concerns may have been partially overshadowed by comment from US Federal Reserve Chairman Jerome Powell as he said policymakers would discuss accelerating the cut at their meeting of December. At the same time, the yield on the 10-year Treasury bill stands at 1.52%, while the US indices are mixed, not far from their opening levels.

The EU did not release relevant macroeconomic figures, while the US released applications for MBA mortgages for the week ended December 3, up 2% from -7% the month before. The country also released the JOLTS October job postings, which show the number of job postings jumped to 11.0 million on the last working day in October, although hires were little changed at 6 , 5 million and that the total number of departures dropped slightly to 5.9 million. Germany will release October’s trade balance on Thursday, while the United States will release initial jobless claims for the week ending December 3.

Short-term technical outlook EUR / USD

The EUR / USD daily chart shows that it rallied once, breaking above its 20 SMA, but further gains are not yet clear. Technical indicators continue to improve but remain at negative levels. Additionally, the pair is developing below the 38.2% Fibonacci retracement of the November rally at 1.1380, the immediate resistance level.

The pair has moderate upside potential in the short term. The 4-hour chart shows that the pair eventually moved above the 20 and 100 SMAs, which continue to converge, as technical indicators lost their positive momentum and stabilized at positive levels.

Support levels: 1.1310 1.1265 1.1220

Resistance levels: 1.1380 1.1425 1.1470

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