EUR/USD Forecast: Bearish ahead of ECB’s decision
|EUR/USD Current Price: 1.1089
- ECB expected to maintain the monetary policy on-hold, Lagarde’s outlook on the economy critical.
- US President Trump revived concerns about a trade conflict with the EU.
- EUR/USD neutral-to-bearish, steeper decline expected on a break below 1.1065.
The greenback weakened against all of its major rivals but the EUR, with the EUR/USD pair extending its January decline to 1.1069 and spending the day below the 1.1100 level. A better market mood amid cooling concerns related to China’s virus outbreak played against the American dollar. As for the shared currency, concerns about US tariffs on EU cars’ imports, and the upcoming ECB meeting this Thursday, weighed.
The European Central Bank is largely expected to maintain its monetary policy unchanged, although speculative interest would like to hear Mrs Lagarde’s words on economic progress before compromising with the EUR. The latest signs of improvement may fall short of confirming a bottom, but for sure are encouraging. The US macroeconomic calendar will remain light, as the country will publish weekly unemployment claims figures and the January Kansas Fed Manufacturing Activity Index.
EUR/USD short-term technical outlook
The EUR/USD pair is trading around its daily opening in the 1.1080 price zone, and the risk remains skewed to the downside, amid a lower low and a lower high daily basis. The short-term picture is neutral-to-bearish, as, in the 4-hour chart, the pair was unable to recover beyond a bearish 20 SMA, which keeps heading south below the larger ones. Technical indicators lack directional strength, with the Momentum within neutral levels and the RSI gaining downside traction at around 41. A critical support level comes at 1.1065, the level to break to confirm a steeper decline.
Support levels: 1.1065 1.1020 1.0980
Resistance levels: 1.1140 1.1180 1.1220
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.