EUR/USD Forecast: Dollar keeps strengthening
EUR/USD Current price: 1.1448
- Central bank imbalances back EUR/USD decline, anticipating lower lows for the year.
- The US November Michigan Consumer Sentiment Index is foreseen at 72.4.
- EUR/USD is extremely oversold in the near term, but it could still fall.
The EUR/USD pair trades near a fresh 2021 low of 1.1445, achieved early on Thursday, as demand for the greenback continued on the back of inflation-related concerns. This week both China and the US reported Consumer Price Index much higher than anticipated and well above central banks’ targets. The situation replicates in several major economies, resulting in, so far, modest responses from central banks.
The macroeconomic calendar had nothing relevant to offer, as the US celebrated Veterans Day. Wall Street was active but traded with a sour tone in the absence of a fresh catalyst. The Dow Jones Industrial Average remains under strong selling pressure, although its counterparts trade in the green heading into the close.
On Friday, the EU will release September Industrial Production, foreseen down 0.5% MoM and improving 4.1% on a yearly basis. The US will publish the preliminary estimate of the November Michigan Consumer Sentiment Index, foreseen at 72.4 from 71.7 in October.
EUR/USD short-term technical outlook
The EUR/USD pair is poised to extend its decline according to technical readings in the daily chart. The pair extended its slide below the 20 SMA, which accelerated its decline below the longer ones. Meanwhile, technical indicators maintain their bearish slopes within negative levels, approaching oversold readings.
The pair is extremely overbought in the 4-hour chart, with technical indicators partially losing their negative momentum but still heading lower. The pair is developing far below bearish moving averages, and a corrective advance is not out of the table, although with the pair pressuring its lows, the risk is skewed to the downside.
Support levels: 1.1450 1.1410 1.1370
Resistance levels: 1.1515 1.1550 1.1600
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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.
