EUR/USD Forecast: Bears looking for a test of 1.1470
EUR/USD Current price: 1.1544
- US ADP survey showed that the private sector added 568K new jobs in September.
- European data unexpectedly missed expectations, adding pressure on the shared currency.
- EUR/USD is oversold, but another leg lower is likely in the near term.
The EUR/USD pair plummeted to a fresh 2021 low of 1.1528 during the European session, holding nearby ahead of Wall Street’s opening. The dollar trades mixed in a risk-averse environment, posting gains vs its high-yielding rivals yet easing against safe-haven assets. Concerns revolve around persistent higher inflation and supply chain disruptions.
Meanwhile, US government bond yields are up, backed by a stronger than anticipated US ADP survey. According to the release, the private sector added 568K new positions in September, beating expectations and despite the spread of the coronavirus Delta variant in the country. The yield on the benchmark 10-year Treasury note peaked at 1.573%, although it currently stands around 1.53%.
European data released earlier in the day missed expectations, adding pressure on the shared currency. German Factory Orders fell 7.7% in August, much worse than the -2.1% expected. Also, Retail Sales in the EU rose 0.3% MoM, below the expected 0.8%.
EUR/USD short-term technical outlook
The EUR/USD pair is poised to extend its slump, with market participants eyeing the 1.1470 price zone, a strong static support area. A break below the level on a first attempt seems quite unlikely, but it’s possible.
From a technical point of view, the risk is skewed to the downside. The daily chart shows that technical indicators maintain their bearish slopes within oversold readings as the pair keeps collapsing below firmly bearish moving averages. The near term picture also supports another leg lower, as the pair accelerated its slump once breaking below its 20 SMA. Meanwhile, technical indicators hold near oversold readings, barely losing their strength downwards.
Support levels: 1.1520 1.1475 1.1440
Resistance levels: 1.1590 1.1640 1.1685
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.
