EUR/USD Forex Forecast – Higher Ahead of Powell’s Crucial Testimony on Tuesday

The Euro is edging higher as Treasury yields fell on Monday, weakening U.S. dollar demand. The single currency is rising despite dismal consumer confidence data and weaker-than-expected retail sales data from Europe.

The trading is a little light as investors await crucial economic data releases and comments from Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday.

At 16:55 GMT, the EUR/USD is trading 1.0682, up 0.0048 or +0.45%. The Invesco CurrencyShares Euro Trust ETF (FXE) settled at $98.56, up $0.46 or +0.47%.

Fed Chairman Powell is expected to speak before Congress on Tuesday and Wednesday about the central bank’s expectations regarding inflation and what this means for its policy approach.

In other news, Euro area investor confidence decreased more than expected in March as expectations deteriorated sharply despite receding fears of a recession, survey results from the behavioral research institute Sentix showed Monday.

Euro Zone retail sales rebounded much less than expected month-on-month in January and were still lower than 12 months earlier, underlining the weakness of consumer demand in the Euro Zone and the broader economic slowdown, data showed on Monday.

The price action suggests traders shrugged off both data releases.

Daily EUR/USD Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 1.0533 will signal a resumption of the downtrend. The main trend will change to up on a move through 1.1033.

The minor trend is up. This is controlling the momentum. A trade through 1.0566 will change the minor trend to up.

The EUR/USD is currently trading on the strong side of a long-term 50% level at 1.0661, followed by a short-term pivot at 1.0613. On the upside, the target is a 50% level at 1.0783.

Daily EUR/USD Technical Forecast

Trader reaction to 1.0661 will determine the direction of the EUR/USD on Monday.

Bullish Scenario

A sustained move over 1.0661 will indicate the presence of buyers. Taking out the minor top at 1.0705 will indicate the buying is getting stronger. If this creates enough upside momentum then look for a surge into 1.0783 – 1.0804.

Bearish Scenario

A sustained move under 1.0661 will signal the presence of sellers. This could trigger a quick break into the minor pivot at 1.0613. This is a potential trigger point for an acceleration to the downside.