EUR/USD Forecast: 1.1000 proves to be a tough resistance to crack

• EUR/USD holds steady near 1.0950 after Tuesday’s rally.
• The pair’s recent action highlighted the strength of 1.1000 resistance.
• The technical outlook for the short term remains bullish.

EUR/USD rose sharply but lost its bullish momentum after coming within a touching distance of 1.1000. The pair stays relatively quiet and fluctuates at around 1.0950 mid-week, while the technical outlook suggests that the bullish bias remains intact. 

The renewed selling pressure surrounding the US Dollar (USD) triggered a rally in EUR/USD in the second half of the day on Tuesday. The positive opening in Wall Street, combined with retreating US Treasury bond yields, made it difficult for the USD to find demand despite the better-than-expected Housing Starts data.

Early Wednesday, soft inflation data from the UK revived expectations for a Bank of England rate cut in the first half of next year and caused Pound Sterling to suffer heavy losses against its rivals. Although the USD managed to capture some of the capital outflows, the Euro also attracted investors, with EUR/GBP rising to a fresh three-week high above 0.8650.