EUR/USD Forecast: Bearish technical cues, sellers could aim back towards retesting 1.1200 handle


The EUR/USD pair posted its first down day in the previous five on Thursday, though bulls showed some resilience below the 1.1300 round figure mark. The shared currency was weighed down by softer than originally estimated German CPI print, rising 0.4% m/m and 1.5% y/y, which coupled with a modest pickup in the US Dollar demand prompted some profit-taking after the recent up-move of over 150-pips since last Friday. News that China is considering to delay the Trump-Xi meeting to at least April along with a goodish bounce in the US Treasury bond yields provided a minor lift to the greenback. However, disappointing second-tier US economic docket - initial weekly jobless claims and new home sales data, kept a lid on any strong USD upsurge and helped limit deeper losses. 

The pair managed to regain some positive traction during the Asian session on Friday as market participants now look forward to the final Euro-zone consumer inflation figures for some fresh impetus. Meanwhile, the US economic docket features the release of Empire state manufacturing index, industrial production and capacity utilization data, which followed by Prelim UoM Consumer Sentiment and JOLTS Job Openings might further collaborate towards producing some meaningful trading opportunities on the last day of the week. 

From a technical perspective, the overnight slide dragged the pair below support marked by the lower end of a short-term ascending trend-channel formation on the 1-hourly chart, albeit lacked strong bearish conviction. Hence, it would be prudent to wait for a follow-through selling before positioning for any further near-term depreciating move towards the 1.1250-45 region en-route 1.1225 support and the 1.1200 round figure mark. On the flip side, sustained move back above the 1.1325-30 area might negate the bearish set-up and accelerate the up-move towards 50-day SMA hurdle near the 1.1370 region before the pair eventually aims to reclaim the 1.1400 round figure mark.

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