EUR/USD Forecast: Bull retain control in a slow start to the week

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0924

Financial markets continue to drop the US Dollar, hoping the tightening cycle is over.
Germany’s economy will remain on the back foot throughout the last quarter of the year.
EUR/USD lacks momentum, but the risk remains skewed to the upside.

The EUR/USD pair traded as high as 1.0939 on Monday as market participants cheered the end of monetary tightening. United States (US) inflation and employment-related data published in the past few weeks indicated that price pressures continued receding in October while the labor market loosened. The US Dollar edged lower against all its major rivals throughout the Asian session as stock markets advanced.

Government bonds declined in Asia, which helped Treasury yields bounce back from the two-month lows posted last Friday. Still, the 10-year Treasury note offers 4.47%, up modest 3 basis points (bps), far from the roughly 5% it yielded mid-October.

The German Bundesbank posted its monthly report, showing the central bank does not expect an economic recovery at the beginning of 2024, with a slight decline anticipated for the last quarter of 2023. The bank also noted the local economy continues to experience difficult economic conditions.

Data-wise, Germany released the October Producer Price Index, down 0.1% MoM as expected. The annual reading printed at -11%, also meeting the market’s forecast. The US calendar has nothing relevant to offer on Monday, but the Federal Open Market Committee (FOMC) will unveil the Minutes of its latest meeting on Tuesday.

EUR/USD short-term technical outlook

The EUR/USD pair is poised to extend its advance according to the daily chart. The pair is up for a second consecutive day, extending gains above all its moving averages. The 20 Simple Moving Average heads firmly north, far below the current level, also below the 100 and 200 SMAs, but still reflecting persistent buying interest. Technical indicators, in the meantime, pick up with uneven strength within overbought levels, skewing the risk to the upside.

Near term, EUR/USD lacks momentum. The 4-hour chart shows the pair develops above all its moving averages, with the 20 SMA partially losing its upward strength, although still far above the longer ones, limiting the downside. At the same time, the Momentum indicator turned directionless within positive levels, while the Relative Strength Index (RSI) indicator eases from extreme overbought readings. The chances of a downward move are limited, while a test of 1.0960 is more likely in the upcoming sessions.

Support levels: 1.0890 1.0840 1.0800

Resistance levels: 1.0960 1.1005 1.1045

View Live Chart for EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited

Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.