EUR/USD Analysis: optimism doing little for the EUR

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1031

German October ZEW Survey on Economic Sentiment came in slightly better than expected.
The IMF lower this year’s global growth forecast to 3.0% from 3.2%.
EUR/USD keeps hovering within familiar levels, but a lower low skews the risk to the downside.

Market players are looking for reasons to remain optimistic, and major pairs’ behavior confirmed so this Tuesday, as the dollar, which was recovering some ground, quickly changed course following a Brexit-positive headline. The EUR/USD pair hit a daily low of 1.0990, from where it surged to 1.1044, ending the US session not far from below this last. The early decline came alongside the IMF announcement, as it lowered this year’s global growth forecast to 3.0% from 3.2% in July, the lowest estimate since the financial crisis a decade ago.

Germany released the ZEW Survey on Economic Sentiment, which came in at -22.8 for the country at -23.5 for the EU in October, slightly better than anticipated, although still near record lows. The US didn’t release relevant data. This Wednesday, the EU will release September inflation data, with the core yearly CPI seen at 1.0%. The US will publish September Retail Sales, seen up by 0.3% monthly basis.

EUR/USD short-term technical outlook

The EUR/USD pair has retreated to met buyers around the 23.6% retracement of its latest bullish run, unable to recover its bullish poise. In the 4 hours chart, the 20 SMA hovers around the Fibonacci resistance, while the Momentum indicator steepened its decline within negative levels. The RSI, on the other hand, stands directionless around 55, as the pair continues trading within familiar levels. The fact that the pair was unable to surpass the 1.1045 resistance puts a lid on further gains, with increased chances of a bearish extension on a break below the daily low, which is also the 38.2% retracement of the mentioned daily advance.

Support levels: 1.1000 1.0960 1.0920

Resistance levels: 1.1045 1.1080 1.1120

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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