EUR/USD Forecast: Bulls hesitate ahead of critical first-tier events

EUR/USD Current price: 1.0947

• Germany and the Eurozone will publish the Harmonized Index of Consumer Prices this week.
• The United States will unveil October Personal Consumption Expenditures - Price Index.
• EUR/USD is technically bullish but lacks momentum in the near term.

The EUR/USD pair maintains its positive tone at the beginning of the week and battles the 1.0960 level, a strong static resistance level. The US Dollar remains under selling pressure despite financial markets being cautious, with Asian stock markets in the red and European indexes posting modest losses. Poor Chinese industrial-related data spurred concerns and kept stocks under pressure, although demand for safety diverged away from the USD.

Data-wise, the macroeconomic calendar has nothing relevant to offer at the beginning of the week, with first-tier events scheduled throughout the next few days limiting price action. This week, Germany and the Eurozone will unveil the preliminary estimates of their respective November Harmonized Index of Consumer Prices (HICP), while the United States (US) will publish the October Personal Consumption Expenditures (PCE) - Price Index, the Federal Reserve (Fed) favorite’s inflation figure. Investors will likely limit their trading commitments ahead of inflation-related data that could define what’s next from central banks.

EUR/USD short-term technical outlook

The daily chart for EUR/USD shows bulls retain control, as technical indicators resumed their advance between positive levels after correcting extreme overbought conditions. In fact, the Relative Strength Index (RSI) indicator is entering overbought territory without signs of upward exhaustion,  currently at around 69. At the same time, the 20 Simple Moving Average (SMA) keeps heading north far below the current level and is about to cross above a flat 100 SMA, usually seen as a bullish signal.

In the near term, and according to the 4-hour chart, the risk skews to the upside, although the momentum seems limited. The pair is meeting sellers around the 61.8% Fibonacci retracement of the 1.1275/1.0447 slump at 1.0960, the level to surpass to confirm another leg north. Meanwhile, technical indicators remain within positive levels, although with uneven directional strength. Finally, EUR/USD develops above all its moving averages, although the 20 SMA offers a modest upward slope, indicating near-term hesitation among buyers.

Support levels: 1.0910 1.0860 1.0825

Resistance levels: 1.0960 1.1005 1.1045

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