EURUSD Price Well Placed to Extend Gains
EURUSD price, news and analysis:
- The EURUSD price chart is looking positive after Wednesday’s climb above the 200-day moving average, with 1.16 the next level in sight.
- From a fundamental perspective, USD has been weakened by FOMC minutes suggesting that the Fed will think carefully before raising US interest rates again.
EURUSD technical outlook positive
EURUSD broke above the 200-day moving average Wednesday and, after a likely short period of consolidation, looks to be in a good position to extend its gains to 1.16 near term after sailing through the psychologically important 1.15 level. Above there, the 1.1622 high touched on October 16 would be a possible second target.
Meanwhile, to the downside, there is support at 1.1448 from the 100-day moving average, at 1.1317 from a rising trendline and at the 1.1299 January 2 low.
EURUSD Price Chart, Daily Timeframe (July 16, 2018 – January 10, 2019)
Chart by IG (You can click on it for a larger image)
EURUSD fundamental outlook also positive
From a fundamental perspective, EURUSD is benefiting from a weaker USD after the minutes of the US rate-setting Federal Open Market Committee meeting on December 18-19 that implied interest rates could be on hold through March or even longer. The minutes reported that many FOMC members felt the central bank “could afford to be patient about further policy firming”.
In addition, trade talks between the US and China seem to be progressing, although there has been little detail yet, potentially weakening demand for safe-haven currencies like the US Dollar. A lack of progress on US President Donald Trump’s plan to build a wall between the US and Mexico has so far failed to affect the USD much, and nor have the partial US government shutdown or talk of further moves to stimulate the Chinese economy.
This session, the European Central Bank’s minutes of its December 12-13 Governing Council meeting at 1230 GMT are unlikely to affect market prices but there could be some movement after Federal Reserve Chair Jerome Powell speaks to the Economic Club of Washington at 1700 GMT.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.