EUR/USD Forecast: Bears dominate a quiet working day

EUR/USD Current price: 1.1462

Wall Street will operate normally on Veterans Day, bond markets will remain close.
The American dollar retains its post-US inflation strength on a lighter day.
EUR/USD is technically bearish but hovering around a critical support area.

The EUR/USD pair fell to 1.1453, a fresh 2021 low and a level not seen since July 2020. The dollar remains strong amid ruling risk-aversion, as investors discount a more aggressive tightening from the US Federal Reserve, following news that US inflation stands at its highest in three decades.

Stocks trade with a soft tone, although most Asian and European indexes trade in the green. US indexes are set to open marginally higher and will work normally despite the country celebrating Veterans Day. Bond markets will be closed, and the macroeconomic calendar has nothing to offer. The USD may correct lower as market participants take some profits out of the table, but dollar buyers could take their chances at lower levels.

EUR/USD short-term technical outlook

The EUR/USD pair is trading at a long-term static relevant support area. Between 2017 and 2020, the pair has set multiple monthly highs and lows in the 1.1450/70 price zone, where it currently trades. Technical readings favor a bearish extension, as, in the daily chart, EUR/USD develops far below all of its moving averages, while technical indicators maintain their bearish slopes within negative levels.

The pair is overbought in the near term but without signs of bearish exhaustion. In the 4 hour chart, the Momentum indicator heads firmly lower at extreme levels while the RSI consolidates at 24. At the same time, the 20 SMA turned firmly south below the longer ones and roughly 100 pips above the current level.

Support levels: 1.1450 1.1410 1.1370

Resistance levels: 1.1515 1.1550 1.1600

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