EUR/USD Forecast: short-term bearish correction underway
|The EUR/USD pair trades marginally higher in a quiet European morning, near a daily high of 1.1879, as a scarce macroeconomic calendar in Europe fails to motivate investors, whilst the greenback is broadly weak following Fed's meeting Minutes released late Wednesday. Later today an ahead of Wall Street's opening, the US will release September PPI figures, although the market will likely wait for the later speeches of policymakers from the EU and the US. ECB's President Draghi and Fed's Brainard are due to participate in a panel discussion about monetary policy at the Peterson Institute for International Economics in Washington DC. Also, another Fed speakers are scheduled for today, although little is expected from them. The main events of the week, anyway, will be US inflation and retail sales data, scheduled for Friday.
From a technical point of view, the pair seems due to a downward correction in the short term, as in the 4 hours chart, the price was unable to break above its 200 SMA, whilst technical indicators have begun retreating from overbought readings. Furthermore, the 1.1880/1.1900 region has been attracting selling interest by the ends of September, and once the pair broke lower, and it would take a strong catalyst to push the pair beyond the level. In the same chart, however, the 20 SMA maintains a sharp bullish slope an is about to cross above the 100 SMA, both near the 38.2% retracement of this October advance, indicating that a bearish movement, beyond a correction, is quite unlikely.
The pair has a strong static support in the 1.1820/30 region, followed by 1.1790 price zone. It would take an upward acceleration through 1.1900 to see the pair extending its advance, first up to 1.1930, an later to 1.1965.
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