EUR/USD Forecast: Bouncing from monthly lows but still at risk of falling

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2117

EU Industrial Production picked up in April, up by 0.8% MoM.
US indexes edged lower while Treasury yields picked up as the focus stays on the Fed.
EUR/USD is at risk of accelerating its slump, mainly on a break below 1.2090.

The EUR/USD pair is up at the start of the week, trading in the 1.2120 price zone. The dollar advanced against safe-haven rivals but eased against those considered high-yielding despite US Treasury yields advanced, and Wall Street turned red. The macroeconomic calendar had no impact on currencies, as the EU published April Industrial Production, which improved 0.8% MoM and 39.3% YoY, much better than anticipated. The focus is on the US Federal Reserve monetary policy’s decision to be out on Wednesday.

On Tuesday, Germany will publish the May Consumer Price Index, expected to be confirmed at 2.5% YoY, while the EU will release the April Trade Balance. The US will unveil May Retail Sales, foreseen down by 0.8%.

EUR/USD short-term technical outlook

The EUR/USD has recovered from a monthly low of 1.2092, but its bullish potential is limited. The 4-hour chart shows that the pair held below all of its moving averages, with the 20 SMA heading firmly lower and crossing below the 200 SMA. Technical indicators turned lower within negative levels and after correcting overbought conditions, indicating absent buying interest. Further declines could be expected on a break below 1.2092, the monthly low.

Support levels: 1.2090 1.2050 1.2010

Resistance levels: 1.2130 1.2170 1.2210

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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