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Forex: EUR/USD peaked above 1.3100 after completing 375 pips advance in 5 sessions

FXstreet.com (San Francisco) - The EUR/USD is currently consolidating levels above the 1.3050 following the bullish movement performed in the early Wednesday session. The EUR/USD posted the highest level since March 8th at 1.3120 in Asia, but the pair was unable to keep the 1.3100, retracing towards the current 1.3070 area throughout the European and American sessions.

The Euro closed its first negative day in the last 6 sessions as the currency market was dominated by the risk aversion, but in the last 5 session, the EUR/USD advanced 375 pips from April 4th bottom at 1.2745 to the current high at 1.3120.

Closing 0.11% below on the day, the EUR/USD is strongly bearish according to the FXstreet.com trend index. Indicators such as MACD, CCI and Momentum are bearish while the Stochastic is bullish. As for the short term, next support at 1.3050 (Wednesday's low) ahead of 1.3006 (low Apr.9) and 1.2963 (low Apr.8). On the upside, a breach of 1.3135 (high Mar.8) would expose 1.3163 (high Feb.28) and then 1.3229 (50% of Feb-Apr slide).

According to Fan Yang, analyst at FXTimes, the EUR/USD is set to extend gains. "EUR/USD continues to reverse against the 1.3710-1.2744 decline that formed throughout March. So far in April, the EUR/USD has made a 38.2% retracement, cracking the 1.31 handle as seen in the 4H chart," points Yang. The "EUR/USD is still in its first swing that broke above a double bottom, though the structure is more like a diagonal triangle now," the analyst concludes.

In line of Yang analysis, more upside aggressive targets for the rest of this week and the next are the 50% retracement at 1.3227. And the 61.8% retracement at 1.3340.

Scotiabank sees more bullishness ahead in the majors pairs, the Scotiabank strategists agree that market needs to see resistance of key levels (50D MA and the 38.2% Fib) for new highs. However, UBS Strategists Gareth Berry and Geoffrey Yu believe that there is a generally neutral-trending bias ahead. The EUR/USD maintains a neutral outlook, as there is a strong resistance at 1.3115. Meanwhile, "a closing break above this would extend the recovery to 1.3228."

The Thursday ahead:

Looking into Thursday’s calendar, consumer prices in Germany and France will precede the ECB Monthly Report ahead of 3-year bond Italian auction. In the US economy, Imports/Exports Prices are due as well as the weekly report on the labor market.

Earlier in the day, the unemployment data in Australia will be a challenge for the fresh 11-week highs at 1.0550 reached on Wednesday.

- ECB Monthly Report
- US Initial Jobless Claims

Session Recap: Yen declines further; USD mixed

The EUR/USD reached on Wednesday its highest level since March 8th at 1.3120, but the pair was unable to hold this levels and the euro retraced to trade just above the 1.3050.
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