EUR/USD Forecast: Bearish ahead of ECB’s decision

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1089

ECB expected to maintain the monetary policy on-hold, Lagarde’s outlook on the economy critical.
US President Trump revived concerns about a trade conflict with the EU.
EUR/USD neutral-to-bearish, steeper decline expected on a break below 1.1065.

The greenback weakened against all of its major rivals but the EUR, with the EUR/USD pair extending its January decline to 1.1069 and spending the day below the 1.1100 level. A better market mood amid cooling concerns related to China’s virus outbreak played against the American dollar. As for the shared currency, concerns about US tariffs on EU cars’ imports, and the upcoming ECB meeting this Thursday, weighed.

The European Central Bank is largely expected to maintain its monetary policy unchanged, although speculative interest would like to hear Mrs Lagarde’s words on economic progress before compromising with the EUR. The latest signs of improvement may fall short of confirming a bottom, but for sure are encouraging. The US macroeconomic calendar will remain light, as the country will publish weekly unemployment claims figures and the January Kansas Fed Manufacturing Activity Index.

EUR/USD short-term technical outlook

The EUR/USD pair is trading around its daily opening in the 1.1080 price zone, and the risk remains skewed to the downside, amid a lower low and a lower high daily basis. The short-term picture is neutral-to-bearish, as, in the 4-hour chart, the pair was unable to recover beyond a bearish 20 SMA, which keeps heading south below the larger ones. Technical indicators lack directional strength, with the Momentum within neutral levels and the RSI gaining downside traction at around 41. A critical support level comes at 1.1065, the level to break to confirm a steeper decline.

Support levels: 1.1065 1.1020 1.0980

Resistance levels: 1.1140 1.1180 1.1220

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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