EUR/USD Forecast: Bears giving it another try

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1108

US inflation failed to impress, meeting the market’s expectations yearly basis.
Trade tensions between the US and the EU weigh on the shared currency.
EUR/USD turning bearish in the short-term, after meeting sellers around a critical Fibonacci level.

The EUR/USD pair is losing some ground this Tuesday, although still confined to a tight intraday range. The pair hit a high of 1.1146 on Monday and was unable to surpass it, despite the upbeat mood that prevailed in the Asian session. The positive sentiment faded during London trading hours.

News indicated that the EU Trade Commissioner Phil Hogan is heading to Washington today to meet US Trade Representative Robert Lighthizer to pour some cold water on the trade relationship between the two economies after US President Trump threatened to retaliate on French tax on US firms. Also, the White House announced it would include Switzerland in a currency manipulator watch-list.

Ahead of Wall Street opening, the US has just released the final version of December inflation. According to the official report, the annual CPI came in as expected at 2.3%, while the core reading also printed 2.3%, as expected. Monthly core inflation, however, missed the market’s expectations, rising by 0.1%.

EUR/USD short-term technical outlook

The EUR/USD pair pared its decline after unimpressive inflation figures, trading at around 1.1110. Measuring the decline between 1.1238 and 1.1084, the pair has topped at around the 38.2% retracement at 1.1145, now a relevant static resistance level. In the 4-hour chart, the price is currently below its 20 and 100 SMA while battling the 200 SMA, all of them lacking directional strength. Technical indicators have turned south, with the RSI already within negative levels, suggesting additional slides ahead.

Support levels: 1.1090 1.1065 1.1020

Resistance levels: 1.1145 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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