EUR/USD Forecast: Bulls paused ahead of fresh clues

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1799

European data missed the market’s expectations, limiting the upside for EUR/USD.
Market participants are paying no attention to the macroeconomic calendar.
EUR/USD holds near its August high, with the risk skewed to the upside.

The week started in slow motion as investors finished digesting the dovish stance of US Federal Reserve Chair Jerome Powell while UK markets were closed amid a local holiday. The EUR/USD pair hovered around 1.1800, peaking at 1.1809 and ending the day just below the round figure. Meanwhile, European indexes managed to post some modest gains, providing support to US indexes which ended the day mixed.

Data coming from the EU was tepid, limiting the shared currency bullish potential. The EU published the August Economic Sentiment Indicator, which printed at 117.5, missing the expected 117.9. Germany released the preliminary estimate of the August Consumer Price Index which printed at 0% MoM and 3.9% YoY. Finally, the US published July Pending Home Sales, which declined by 1.8% in the month and the Dallas Fed Manufacturing Business Index, down to 9 from 27.3 in the previous month.

On Tuesday, the EU will release the preliminary estimate of August inflation data, with the annual Consumer Price Index, foreseen at 2.8% YoY. The US will release August Consumer Confidence and the August Chicago Purchasing Managers Index.

EUR/USD short-term technical outlook

The EUR/USD pair trades near the 61.8% retracement of its latest daily slide at around 1.1820, the level to surpass to confirm another leg north. The near term picture is bullish, as a flat 200 SMA provided intraday support, while the 20 SMA advances beyond the 100 SMA, both below the longer ones. At the same time, technical indicators hold within positive levels, although lacking directional strength.

Support levels: 1.1745 1.1700 1.1660

Resistance levels: 1.1820 1.1865 1.1900

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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