EUR/USD Price Forecast: Bullish Scenario Still in the Picture Above 1.1300

EUR/USD Price Forecast: Bullish Scenario Still in the Picture Above 1.1300

The EUR/USD currency pair has gained momentum on Wednesday, climbing to the 1.1330 region during the early European trading session, up 0.42% on the day. This price action is driven by a weaker US Dollar, as market participants continue to digest the impact of Moody's recent downgrade of the US credit rating to ‘Aaa’ from ‘Aa1.’ This downgrade highlights concerns over the ballooning US deficits and interest charges, leading to broader risk-off sentiment and a decline in the Greenback.

Technical Outlook: Bullish Momentum Above 1.1300

From a technical perspective, the EUR/USD pair remains firmly supported above the key 100-day Exponential Moving Average (EMA) on the daily chart, which suggests that the bullish trend is intact. Additionally, the Relative Strength Index (RSI) is above the neutral 50 level at around 57.45, confirming positive momentum and signaling that the bulls are in control.

Resistance and Support Levels

The immediate resistance for EUR/USD lies at 1.1382, the high reached on May 6. A clear breakout above this level could trigger further bullish momentum, with the next target at 1.1455, marking the upper Bollinger Band. Beyond that, the next significant resistance level is at 1.1574, the high from April 21.

On the downside, the first level of support to watch is at 1.1211. As long as EUR/USD stays above this level, the bullish outlook remains intact.

Market Sentiment and Outlook

The broader market sentiment continues to favor the Euro, supported by a weaker US Dollar and ongoing concerns about US economic stability. As long as EUR/USD remains above the 100-day EMA and RSI remains above 50, there is potential for further gains, with traders focusing on key resistance levels at 1.1382 and beyond.

Investors will also be looking ahead to economic data releases and any potential developments in US fiscal policy for further direction.