EUR/USD Forecast: A test of 1.1100 on the table

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1155

Tepid German data limits the near-term Euro's upward potential.
US Consumer Confidence may spur some action after Wall Street’s opening.
EUR/USD could extend its near-term slide towards the 1.1100 price zone.

The EUR/USD pair sees little action on Tuesday, trading in a tight range around the 1.1160 level, as market players await first-tier data scheduled for later in the week. Both the Eurozone and the United States (US) will publish inflation-related figures that could influence upcoming central banks’ decisions.

The market mood is generally positive, although with a dose of caution. Nevertheless and, regardless of the sentiment, the US Dollar remains unattractive as investors keep betting on a Federal Reserve (Fed) interest rate cut in September.

On the other hand, the Euro is having a hard time attracting speculative interest, as local macroeconomic data fails to impress. Germany released the September GfK Consumer Confidence Survey, which contracted to -22 from a revised -18.6 in August. Additionally, the country’s Q2 Gross Domestic Product (GDP) was confirmed at -0.1% QoQ, while the annual estimate was upwardly revised from -0.1% to 0%.

The US will release the June Housing Price Index, while after Wall Street’s opening, the country will publish CB Consumer Confidence, foreseen at 100.9 after printing 100.3 in July.

EUR/USD short-term technical outlook

After closing Monday in the red, the EUR/USD pair trades near the weekly low at 1.1149, with intraday spikes being quickly rejected, somehow suggesting another leg south. Technical readings in the daily chart, however, show the pair is far from bearish. It keeps developing far above all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north over 100 pips below the current level while well above the 100 and 200 SMAs. At the same time, technical indicators remain directionless well into positive levels, far from suggesting a steeper slide.

The 4-hour chart shows that EUR/USD is pressuring a flat 20 SMA, while the 100 and 200 SMAs maintain their upward slopes well below the shorter one. Finally, technical indicators gyrated lower, gaining downward traction within positive levels. A test of the 1.1100 level seems likely once the aforementioned weekly low gives up, but additional slides are unlikely in the current scenario.

Support levels: 1.1145 1.1100 1.1065

Resistance levels: 1.1210 1.1250 1.1290

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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