EUR/USD Forecast: dollar's weakness limits the ongoing downward correction
|The EUR/USD pair trades flat for the day in the 1.1740 region, with a lighter macroeconomic calendar and market rushing into safe-haven assets limiting the intraday range. After the European opening the pair is modestly higher, backed by a positive German macroeconomic report, showing that prices at factory levels rose by more than expected in July, up by 0.2% in the month and by 2.3% when compared to a year earlier. Also, the current account of the euro area recorded a surplus of €21.2B in June below market's expectations of €27.3B. Later today, the US will release its August preliminary Michigan consumer sentiment index, while Fed's Kaplan will offer a speech.
The pair is poised to close the week in the red after advancing for five consecutive ones, a sign of a probable top underway. Nevertheless, the dollar is far from market's favor after the latest political jitters in the US, and Fed's dovish minutes for its latest meeting.
In the short term, the pair presents a neutral-to-bearish stance, given that in the 4 hours chart, it's hovering around a bearish 20 SMA, but below the 100 SMA, whilst technical indicators hold flat around their mid-lines. The pair has an immediate resistance in the 1.1770/80 region, with gains above the level exposing the 1.1820/30 price zone, where selling interest will likely contain the advance.
Below 1.1690, on the other hand, the pair can extend its decline to fresh weekly lows around 1.1650, while further declines beyond this last could see the pair nearing 1.1600 by the end of the week.
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