EURUSD Forex Forecast – Aiming for Channel Resistance

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EURUSD is still in its uptrend on the 4-hour chart, as price bounced off the area of interest around the middle and is heading for the top. Price could set its sights on the channel resistance near the 1.1500 major psychological mark before retreating.

At the same time, stochastic is moving up, indicating that buyers are taking control of price action. RSI is also on the move higher, adding confirmation that further gains are likely. However, both oscillators are nearing the overbought regions, which means that the rallies might be short-lived.

EURUSD is also close to the near-term resistance at 1.1400, which is near the previous highs and might keep gains at bay. If so, the pair could start moving sideways and make its way to test support at 1.1000.

EURUSD Forex Fundamentals

The US dollar returned its post-NFP gains, as there have been no major catalysts to sustain the momentum. The upcoming US retail sales release could spur another move higher for the US currency, especially if the actual readings beat expectations. Both headline and core reports are expected to post stronger increases in May compared to the previous month’s gains.

Data from the euro zone has been strong, particularly the numbers coming from Germany. The country printed better than expected increases in factory orders and industrial production, leading many to believe that a recovery is underway in the region’s top economy. However, the Greek debt situation is preventing the euro from banking on these improvements, as the country failed to meet its debt obligations last week and is still facing the prospect of a default.

Greece has opted to bundle its debt payments for the month in hopes of buying more time to secure a deal and receive more bailout funds before the end of June. If that happens, EURUSD could be in for more gains and possibly an upside break of the channel resistance.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.