EUR/USD Forecast: Bears take over below 1.1000
|EUR/USD Current Price: 1.0959
- Tepid earning reports and mixed data undermined the market mood.
- US ISM Manufacturing PMI and JOLTS Job Openings coming up next.
- EUR/USD is poised to extend its decline after breaking through 1.1000.
The EUR/USD pair fell through the 1.1000 threshold early in Asia, bottoming during European trading hours to the 1.0950 price zone. The US Dollar benefited from the Reserve Bank of Australia's (RBA) decision to remain on hold, as policymakers refrained from lifting the Official Cash Rate (OCR), leaving it steady at 4.1%, to “further assess the impact of the increase in interest rates to date and the economic outlook.” Financial markets were looking for a 25 basis points (bps) hike, and the news took its toll on the Aussie.
Additionally, tepid earnings reports undermined the mood. Wall Street closed in the green on Monday but off its highs. Asian shares held on to modest gains, while most European indexes are currently developing in the red, with the German DAX and the UK FTSE100 collapsing following the release of the S&P Global Manufacturing PMIs. The July final readings confirmed a steep economic downturn despite modest upward revisions.
Later today, the United States (US) will release the July ISM Manufacturing PMI, foreseen at 46.8, improving from the previous 46, and June JOLTS Job Openings. Also, S&P Global will publish the final reading of the July Manufacturing PMI, previously estimated at 49.
EUR/USD short-term technical outlook
The EUR/USD pair heads into the US opening trading just above its intraday low and technically poised to extend its slump. The daily chart shows that the pair nears last week's low at 1.0943 after breaking through the 61.8% Fibonacci retracement of the 1.0833/1.0975 rally at 1.1002. Furthermore, technical indicators gain downward traction within negative levels, reflecting increased selling interest. Finally, the pair falls below its 20 Simple Moving Average (SMA) while approaching a flat 100 SMA, providing dynamic support at 1.0910.
EUR/USD is bearish in the near term, as the 4-hour chart shows it fell below all its moving averages. Furthermore, the 20 SMA is crossing below the 200 SMA, both around the aforementioned Fibonacci resistance. Meanwhile, the Momentum indicator retreats from its 100 level while the Relative Strength Index (RSI) indicator heads firmly south at around 35.
Support levels: 1.0945 1.0910 1.0870
Resistance levels: 1.1005 1.1065 1.1105
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