Bullish View
Buy the EUR/USD at 1.1975 and set a take profit at 1.2040 (61.8% retracement).
Add a stop loss at 1.1911 (38.2% retracement).
Timeline: 1 day.
Bearish View
Set a sell-stop at 1.1910 and a take-profit at 1.1832 (23.6% retracement).
Add a stop-loss at 1.2000.
The EUR/USD pair is in a tight range ahead of the important German inflation numbers and US initial jobless claims and March retail sales numbers. It is trading at 1.1975, which is a few pips below this week’s high of 1.1990.
US Retail Sales Ahead
The EUR/USD has had a relatively successful week so far. At the current price, it is more than 2.4% above the lowest level on March 31st. This week, the pair surged after the strong US inflation numbers and their implications.
On Tuesday, data revealed that the headline Consumer Price Index rose to 2.6% in March, the highest it has been in almost eight years. Core CPI that excludes the volatile food and energy products rose by 1.6%. While the inflation numbers were strong, analysts believe that the growth will be temporary and that the Federal Reserve will leave the easy money policy in place.
The EUR/USD pair will today react to the important US retail sales numbers. In general, analysts polled by Reuters expect that sales jumped by 5.9% in March after sliding by 3% in the previous month. They also see the core sales rising by 5.0% after falling by 2.7% in February. This growth will be because of the reopening as the US ramped-up its vaccination process and the recent $1.9 trillion stimulus package.
However, like the CPI numbers, the retail sales data could have an inverse performance to the dollar. If the numbers come out strong, the dollar could decline because the market will take the figures as being temporary.
The EUR/USD will also react to the initial jobless claims numbers. Analysts expect the data to show that more than 700k Americans filed for claims while the continuing claims dropped to 3.7 million. It will also react to the Philadelphia and New York manufacturing figures. In Europe, the pair will react to the German, French, and Italian jobs numbers.
EUR/USD Technical Forecast
The four-hour chart shows that the EUR/USD pair has been in a strong upward trend. It is trading at the 50% Fibonacci retracement level where it has found some resistance. Also, it has moved above the 25-day and 50-day EMA and is above the bullish pennant pattern shown in black. Therefore, the upward trend will likely continue as bulls target the next Fibonacci level at 1.2038 that is 0.50% above the current price.
