EUR/USD Forecast: Bears take the lead after dismal European data
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UNLOCK OFFEREUR/USD Current Price: 0.9921
- The European Consumer Price Index soared by a record high of 10.7% YoY.
- Tepid Chinese macroeconomic data weighed on the market mood at the beginning of the week.
- EUR/USD keeps gaining bearish traction in the near term but holds above 0.9900.
The EUR/USD pair trades around 0.9920, losing ground at the beginning of the week after closing Friday at 0.9965. Financial markets started Monday on the backfoot amid tepid Chinese data, signaling the economy contracted further in October, as the NBS Manufacturing PMI fell to 49.2 in October, while the Non-Manufacturing PMI slid to 48.7. Markets concerns were exacerbated by China’s decision to put Wuhan under a strict lockdown amid rising coronavirus cases.
Meanwhile, worrisome EU data hit the shared currency. German Retail Sales were up by 0.9% MoM in September, although down 0.9% from a year earlier. The EU economy grew by 0.2% in the three months to September, according to the preliminary estimate of the Q3 Gross Domestic Product, while the annualized growth was 2.1%, below the previous 4.1%. Finally, the preliminary estimate of the October EU Consumer Price Index came in at 10.7%, a new record high and higher than the 10.2% expected.
The US has a quiet day in terms of data, but a busy week on that side, as the US Federal Reserve will decide on monetary policy on Wednesday, while the country will publish the Nonfarm Payrolls report on Friday.
EUR/USD short-term technical outlook
The EUR/USD pair bottomed at 0.9913, not far from the current level. The bearish potential seems limited due to the cautious stance, but bulls have moved to the sidelines. The daily chart shows that the pair retreated further after testing a bearish 100 SMA, while the 20 SMA keeps grinding north below the current level. Technical indicators, in the meantime, ease within positive levels, reflecting the ongoing decline instead of suggesting more slides ahead.
In the near term and according to the 4-hour chart, chances skew to the downside. The pair is developing below a flat 20 SMA, while the 100 and 200 SMAs are also directionless, converging around 0.9830. Technical indicators head nowhere amid the limited intraday volatility but stand within negative levels. A downward extension below 0.9900 should open the door for a steeper decline in the next couple of sessions.
Support levels: 0.9900 0.9865 0.9830
Resistance levels: 0.9965 1.0010 1.0055
EUR/USD Current Price: 0.9921
- The European Consumer Price Index soared by a record high of 10.7% YoY.
- Tepid Chinese macroeconomic data weighed on the market mood at the beginning of the week.
- EUR/USD keeps gaining bearish traction in the near term but holds above 0.9900.
The EUR/USD pair trades around 0.9920, losing ground at the beginning of the week after closing Friday at 0.9965. Financial markets started Monday on the backfoot amid tepid Chinese data, signaling the economy contracted further in October, as the NBS Manufacturing PMI fell to 49.2 in October, while the Non-Manufacturing PMI slid to 48.7. Markets concerns were exacerbated by China’s decision to put Wuhan under a strict lockdown amid rising coronavirus cases.
Meanwhile, worrisome EU data hit the shared currency. German Retail Sales were up by 0.9% MoM in September, although down 0.9% from a year earlier. The EU economy grew by 0.2% in the three months to September, according to the preliminary estimate of the Q3 Gross Domestic Product, while the annualized growth was 2.1%, below the previous 4.1%. Finally, the preliminary estimate of the October EU Consumer Price Index came in at 10.7%, a new record high and higher than the 10.2% expected.
The US has a quiet day in terms of data, but a busy week on that side, as the US Federal Reserve will decide on monetary policy on Wednesday, while the country will publish the Nonfarm Payrolls report on Friday.
EUR/USD short-term technical outlook
The EUR/USD pair bottomed at 0.9913, not far from the current level. The bearish potential seems limited due to the cautious stance, but bulls have moved to the sidelines. The daily chart shows that the pair retreated further after testing a bearish 100 SMA, while the 20 SMA keeps grinding north below the current level. Technical indicators, in the meantime, ease within positive levels, reflecting the ongoing decline instead of suggesting more slides ahead.
In the near term and according to the 4-hour chart, chances skew to the downside. The pair is developing below a flat 20 SMA, while the 100 and 200 SMAs are also directionless, converging around 0.9830. Technical indicators head nowhere amid the limited intraday volatility but stand within negative levels. A downward extension below 0.9900 should open the door for a steeper decline in the next couple of sessions.
Support levels: 0.9900 0.9865 0.9830
Resistance levels: 0.9965 1.0010 1.0055
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