EUR/USD Forecast

The dollar is firmer across the board and particularly against its European rivals, fueled by renewed risk appetite triggered by Trump promises of an upcoming "phenomenal" tax plan to be announced in "two or three weeks," late Thursday, speaking with airline company leaders. Wall Street jumped to all-time highs, prompting European indexes to open sharply higher. Safe-havens gold and JPY are under pressure, and the EUR/USD pair trades at fresh weekly lows right below the 1.0640 level.

Sentiment is leading the way this Friday, particularly around the common currency, as there are no relevant macroeconomic releases in the region scheduled for today, although German's Buba Weidmann will speak this morning. In the US, attention will focus on the Michigan preliminary consumer sentiment index for February to be release late in the American afternoon.

The technical picture for the EUR/USD pair favors a new leg lower, as in the 4 hours chart, a sharply bearish 20 SMA keeps capping the upside, currently around 1.0670, whilst technical indicators maintain strong bearish slopes below their mid-lines. The immediate support comes at 1.0620, January 30 low, followed by 1.0590. Below this last, the pair has scope to extend its decline down to 1.0565, the 23.6% retracement of the November/January decline.

A sudden u-turn in the greenback could see the pair extending beyond the mentioned 1.0670, but selling interest is aligned around 1.0710, the level to surpass to deny further dollar's gains.

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