EUR/USD Forecast: Corrective decline underway

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1182

Chinese headlines flooded news feeds and dented the market mood.
Softer-than-expected earnings reports put a halt to Wall Street’s rally.
EUR/USD gains bearish momentum and aims to test a critical support level at 1.1105.

The EUR/USD pair recovered the 1.1200 threshold at the beginning of the day, but a worsening market mood limited the advance. The pair topped at 1.1228, easing afterwards to the current 1.1180 region.

Tensions between China and the United States (US) over curbs on the Asian giant chip sector and discouraging earnings reports from companies like Netflix and Tesla weighed on the mood during Asian trading hours. Following a positive close, US indexes lost momentum, with Wall Street’s futures trading in the red ahead of the opening.

At the same time, Chinese headlines flooded news feeds, although most were just rumours. Reports indicated that major local banks were seen selling dollars to slow the yuan’s decline and that authorities are considering easing mortgages to help the troubled housing sector. Additionally, China increased the macro-prudential adjustment parameter for cross-border financing of corporate and financial institutions to 1.5 from 1.25, aiming to boost confidence in the renminbi.

Mid-European morning, Germany released the June Producer Price Index (PPI), which rose by 0.1% YoY, slightly above the market expectation of a flat reading. The Eurozone reported the May Current Account seasonally adjusted at €9.1 billion. Finally, the US published Initial Jobless Claims for the week ended July 14, which printed at 228K, beating expectations. At the same time, the July Philadelphia Fed Manufacturing Survey posted -13.5, worse than the -10 anticipated by market participants. Later in the day, the US will publish June Existing Home Sales, while the EU will unveil the preliminary estimate of July Consumer Confidence.

EUR/USD short-term technical outlook

The daily chart for EUR/USD shows that the pair trades near the lower end of its latest range, with an increased downward bias. Technical indicators extend their slides, leaving overbought territory. Still, the pair develops above bullish moving averages, suggesting any further slides may remain corrective. EUR/USD is currently approaching the 23.6% Fibonacci retracement of the latest daily advance at 1.1170, while the next Fibonacci support comes at 1.1105.

The 4-hour chart shows that the chances of a bearish extension are high, as the pair fell following another failed attempt to advance beyond its 20 Simple Moving Average (SMA), now providing dynamic resistance at around 1.1220. At the same time, technical indicators head south almost vertically within negative levels, reflecting prevalent near-term selling interest.

Support levels: 1.1170 1.1140 1.1105

Resistance levels: 1.1220 1.1275 1.1210

View Live Chart for the EUR/USD

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.

AUD/USD falters just above 0.7000; looks at the jobs data

AUD/USD has briefly managed to surpass the 0.7000 threshold on Wednesday, although the move rapidly dissipated following higher-than-estimated US inflation data in September, which has eventually lent extra legs to the Greenback. Moving forward, the release of the labour market report will take centre stage in Australia on Thursday.

USD/JPY consolidates near 158.50; looks to US CPI for fresh impetus

USD/JPY stays range-bound near 158.50 in the Asian session on Wednesday, with looming intervention risks supporting the Japanese Yen and capping upside amid a softer US Dollar. However, geopolitical uncertainties act as a tailwind for the safe-haven USD and the pair. Traders also seem hesitant ahead of the release of the latest US inflation figures.

Gold remains offered below $4,100

Gold adds to the weekly bearish tone and slips back below the $4,100 mark per troy ounce on Wednesday. Indeed, the precious metal continues to suffer the stronger US Dollar and rising US Treasury yields as bets for extra tightening by the Fed remain on the rise following US inflation figures.

Bitcoin and Gold Forecast: BTC and XAU drop after hot US CPI

Bitcoin (BTC) is edging lower toward $82,000 on Wednesday as headwinds from sticky inflation in the United States (US) force investors to reevaluate their positioning. Gold (XAU/USD) remains under sustained selling pressure, trading below $4,100 and falling for a third consecutive day. As the correction intensifies, a retest of key $4,000 support appears likely unless bearish momentum abates.

Stock futures just went red on the CPI. Here's what the bond market is pricing that equities haven't caught up to

Since late June, the bond market has been pricing in a Federal Reserve (Fed) that keeps raising rates into 2027, and most US stocks have already been marked down for it. The S&P 500 hasn't, because a handful of AI-linked giants make up much of the index and their prices haven't followed the rest.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?