EUR/USD Forecast: Buyers paused, likely to take their chances on dips
|EUR/USD Current Price: 1.0901
- FOMC Meeting Minutes brought nothing new to the table.
- United States has a packed calendar ahead of the long weekend.
- EUR/USD turned lower in the near term, slides likely to be contained.
The EUR/USD pair trades around the 1.0900 level, as the US Dollar gathered some strength on Tuesday, extending its modest advance throughout the first half of Wednesday. Financial markets struggle to find a reason to maintain the pace of US Dollar selling as the macroeconomic calendar has little to offer, while the Thanksgiving holiday in the United States (US) will result in limited activity by the end of the week.
The Federal Open Market Committee (FOMC) released the Minutes of the latest Federal Reserve (Fed) meeting, but the document brought nothing new to the table. Fed officials reiterated their concerns about inflation, adding they are willing to take further action if price pressures resume. Once again, policymakers dismissed the odds for soon-to-come rate hikes, repeating monetary policy needs to stay restrictive for a long time to achieve the 2% inflation goal. Finally, the minutes showed officials will continue to base their decisions on incoming data.
The Eurozone did not publish relevant data, but the US will offer some interesting figures. The country will release October Durable Goods Orders, expected to have declined by 3.1%, and Initial Jobless Claims for the week ended November 17, foreseen at 225K. Additionally and ahead of the long weekend, the US will unveil the final estimate for the November Michigan Consumer Sentiment Index, previously calculated at 60.4.
EUR/USD short-term technical outlook
The EUR/USD pair is trading in the red after posting a lower low for the week of 1.0882. The daily chart shows that technical indicators began correcting overbought conditions, gaining downward traction but still holding well above their midlines. Furthermore, the pair keeps developing far above all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north below directionless longer ones.
Overall, the ongoing slide seems corrective after the pair failed to extend gains beyond the 61.8% Fibonacci retracement of the 1.1275/1.0447 slide at 1.0960. The 50% retracement provides static support at 1.0858.
In the near term, the risk skews to the downside. The 4-hour chart shows that the Momentum indicator crossed its midline into negative territory, while the Relative Strength Index (RSI) indicator heads marginally lower at around 53, suggesting limited selling interest. Finally, EUR/USD is currently below a bullish 20 SMA, while holding well above the longer ones, which also offer upward slopes. Additional declines seem unlikely near term, with buyers likely taking their chances on a slide towards the 1.0860 region.
Support levels: 1.0860 1.0825 1.0780
Resistance levels: 1.0925 1.0960 1.1005
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.