EUR/USD Forecast: Bears retain control as long as 1.1920 caps

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1866

A holiday in the US keeps volumes limited in a slow start to the week.
EU services sector posted healthy growth in June, according to Markit.
EUR/USD is technically bearish and poised to extend its decline.

The EUR/USD pair advances modestly in a slow start to the week, after gapping lower at the weekly opening. The greenback poses a soft tone across the board, although losses are quite limited as well as volatility. A holiday in the US, as the country celebrates Independence Day, keeps most markets closed, exacerbating range-trading.

Elsewhere, Asian markets were mostly down, while European ones post modest gains. The market’s mood is sour amid poor Chinese data and concerns about new covid strains, which seem to be more resilient to vaccines.

On the data front, Markit published the final versions of its June Services PMIs for the EU. The German Index was downwardly revised to 57.5, while that of the whole Union was better than anticipated, reaching 58.3. The EU published July’s Sentix Investor Confidence, which improved from 28.1 to 29.8 but missed the 30 expected.

EUR/USD short-term technical outlook

From a technical point of view, the upside seems limited for the EUR/USD pair. The intraday advance stalled at 1.1880, with the pair currently retreating from such a level. The 4-hour chart shows that the price is barely above a bearish 20 SMA, while technical indicators remain directionless, the Momentum within neutral levels and the RSI currently at 47.

The longer moving averages have accelerated their slides well above the current level, indicating prevalent selling interest. As long as the pair trades below 1.1920, a Fibonacci resistance level, the risk is skewed to the downside.

Support levels: 1.1840 1.1795 1.1750

Resistance levels: 1.1920 1.1960 1.2000

View Live Chart for the EUR/USD

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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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