EUR/USD analysis: short-term bearish, but dollar’s demand restricted

EUR/USD Current Price: 1.1258

• German ZEW survey and US Retail Sales to be out Tuesday.
• Dollar mixed, up only against weakened rivals such as the EUR and the GBP.
• EUR/USD turned lower after another failed attempt at surpassing a key Fibonacci resistance.

The EUR/USD pair is trading near a daily low of 1.1252 ahead of the Asian opening, ending Monday with modest losses, despite the greenback remained out of the market’s favor. The shared currency attempted to extend its previous advance, but was contained by sellers just below the 1.1300 level, later extending its decline on an upbeat US report, as the US NY Empire State Manufacturing Index resulted better-than-anticipated at 4.3, also better than the previous -8.6. The American currency had a poor performance across the board, only up against the EUR and the GBP, as the common currency got affected by news making the rounds about the ECB steepening its monetary easing measures as soon as this month.

This Tuesday, Germany will release the ZEW survey for July, with the Economic Sentiment seen improving just modestly in the country and deteriorating further in the whole Union. The US will publish June Retail Sales, seem modestly up MoM by 0.2%, while Fed’s Chief Powell is due to deliver a speech titled  "Aspects of Monetary Policy in the Post-Crisis Era" at the French G7 Presidency 2019, in Paris. Several other Fed’s speakers will hit the wires throughout the day. The lack of progress in the EUR/USD pair is directly linked to monetary policy, as both central banks announced easing measures coming, and so far, the market can’t make up its mind about which of the two currencies will be the most affected.

EUR/USD short-term technical outlook

The EUR/USD pair is short-term bearish, falling after another failed attempt to establish itself above the 38.2% retracement of the 1.1411/1.1192 decline at 1.1275. The 23.6% retracement of the same slide comes at 1.1244, providing an immediate support.  According to technical readings in the 4 hours chart,  the risk is also skewed to the downside, as the pair fell below its 20 SMA, while technical indicators head south, the Momentum already below its 100 level and the RSI now piercing its mid-line. The downward momentum will likely accelerate on a break below the mentioned Fibonacci support, although with the current restricted dollar’s demand, no fireworks are to be expected. The pair could turn bullish on an advance beyond 1.1305, the 50% retracement of the mentioned daily slide.

Support levels: 1.1245 1.1215 1.1180  

Resistance levels: 1.1275 1.1305 1.1350

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