EUR/USD Forecast: Bearish feast despite Treasury yields retreated sharply

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2065

The US House of Representative passed the coronavirus relief bill on Saturday.
Growth-related data will take center stage at the beginning of the week.
EUR/USD is technically bearish and poised to retest the February low at 1.1951.

The American dollar finished the week with a firm note against its major rivals, with EUR/USD bottoming at 1.2061 and closing the week in the red a handful of pips above this last. The greenback appreciated despite US Treasury yields retreated sharply. Stocks, on the other hand, persisted in their bearish route, with only the Nasdaq posting an intraday advance. Month-end flows are partially responsible for Friday’s movements.

The US published the preliminary estimate of the January Trade Balance, which posted a deficit of $83.7 billion, slightly better than the December one. Personal Income in the same month was up 10%, while Personal Spending rose just 2.4%. The final version of the February Michigan Consumer Sentiment Index came in at 76.8.

On Saturday, the US House of Representatives passed President Joe Biden's $1.9 trillion coronavirus relief package by 219-212 votes. Republican support was missing, but the bill moved to the Senate, where it is expected to pass before March 14, when the previous round of stimulus expires.

The macroeconomic calendar will include the final readings of Markit February Manufacturing PMIs for the EU and the US, while the latter will publish the official ISM report, foreseen at 58-9 from 58.7. Germany will publish the preliminary estimate of February inflation.

EUR/USD short-term technical outlook

The EUR/USD pair is trading a few pips above the 38.2% retracement of its November/January rally. A clear break of the support level could see EUR/USD approaching February low at 1.1951. In the daily chart, the pair has settled below a directionless 20 SMA, while a bullish 100 SMA provides dynamic support around 1.2010. Technical indicators head sharply lower, supporting a bearish continuation, as the RSI already crossed into negative territory. The bearish potential is stronger in the near-term, as, in the 4-hour chart, as the pair is now below all of its moving averages, while technical indicators remain near oversold readings.

Support levels: 1.2060 1.2010 1.1970

Resistance levels: 1.2125 1.2170 1.2215

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold buyers hesitate amid holiday-thinned trading

Gold trades volatile, but within range, as US, China holidays-led thin trading exaggerates moves. The US Dollar extends range play into the US GDP week, with markets pricing at least two Fed rate cuts this year. Technically, Gold tests key support at $5,000; daily RSI still remains bullish.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.