EUR/USD Is Poised To Extend Its Advance Toward The Year High At 1.2349

EUR/USD Current Price: 1.2229

• European Gross Domestic Product was confirmed at -0.6% QoQ in the three months to March.
• The focus now shifts to the FOMC Meeting Minutes scheduled for Wednesday.
• EUR/USD is poised to extend its advance toward the year high at 1.2349.

The EUR/USD pair advanced to 1.2233 this Tuesday, a level that was last seen in February, as speculative interest kept selling the greenback amid US Federal Reserve officials repeating that they won’t change the current ultra-loose monetary policy, despite rising inflationary pressures. Stocks advanced in Asia but were mixed in Europe and the US, which helped the greenback recover some ground ahead of the daily close.

On the data front, Europe published a revision of the first quarter Gross Domestic Product, which matched the previous estimate by printing at -0.6% QoQ.  The annual reading was also unchanged at -1.8%. The US published April Building Permits, which increased a modest 0.3%, while Housing Starts in the same month fell 9.5%.  On Wednesday, the EU will publish the final version of April inflation figures, while the US Federal Reserve will unveil the Minutes of its latest meeting.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair retreated toward the 1.2200 area, from where it bounced back towards the current 1.2230 price zone. The near-term picture suggests that a corrective decline could take place, although it also shows that bulls are in control. In the 4-hour chart, the pair is developing above all of its moving averages, with the 20 SMA accelerating north above the longer ones. Technical indicators retreated from extreme readings but stabilized within overbought levels. The risk is skewed to the upside, and the pair could extend its advance once above 1.2240, the immediate resistance level, eyeing an extension toward 1.2349, the year high.

Support levels: 1.2180 1.2140 1.2095

Resistance levels: 1.2240 1.2290 1.2350

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