EUR/USD Forecast: Bears looking for fresh multi-year lows

Valeria Bednarik FXStreet

EUR/USD Current Price: 0.9893

German Factory Orders plunged 13.6% YoY in July, worse than anticipated.
The US ISM Services PMI is foreseen at 55.1 in August, down from 56.7.
EUR/USD accelerated its decline after failing to sustain early gains.

The EUR/USD pair enjoyed some short-lived demand, reaching a daily high of 0.9986, but trimmed intraday gains ahead of the US opening and returned to the 0.9930 price zone before plummeting towards the current 0.9900 price zone. European equities opened lower amid soaring gas prices, following news that Gazprom has indefinitely closed the Nord Stream 1 pipeline but managed to recover some ground. Nevertheless, the shared currency is among the weakest dollar rivals.

Germany published July Factory Orders, which fell by 1.1% MoM and by 13.6% compared to a year earlier, much worse than anticipated and confirming the economic setback of the Union.

Dollar gains are limited ahead of the release of key US data. The country will publish the ISM Services PMI, foreseen in August at 55.1, down from 56.7 in the previous month. S&P Global will release the final estimate of its Services PMI for the same month, previously estimated at 44.1, and the Composite PMI, expected to be confirmed at 45.

EUR/USD short-term technical outlook

According to the daily chart, the EUR/USD pair maintains its bearish technical stance. The pair is developing below all of its moving averages, with the 20 SMA accelerating its decline below the longer ones, a sign of increasing downward momentum. Technical indicators, in the meantime, head south within negative levels, with still room to extend their slump.

In the near term and according to the 4-hour chart, bears are in full control of the pair. It sunk below a strongly bearish 20 SMA after a failed attempt to advance beyond it. Furthermore, technical indicators resumed their declines, hinting at another leg lower, particularly if the recent multi-year low gives up.

Support levels: 0.9875 0.9830 0.9790

Resistance levels: 0.9950 1.0000 1.0045

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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