EUR/USD Forecast: Dollar’s demand receded despite the dismal mood

EUR/USD Current Price: 1.1842

Softer than expected US data weighed on the greenback, despite the mood remained sour.
The US will publish this Friday the September Michigan Consumer Sentiment Index.
EUR/USD bounced from a fresh one-month low, but the risk remains skewed to the downside.

The EUR/USD pair fell to 1.1736 its lowest in over a month, on the heels of demand for safety, spurred by the US Federal Reserve on Wednesday. Equities plunged in Asia, dragging their overseas counterparts to the downside. European indexes, however, shrug off most of the intraday losses, helping the pair to recover some ground. It currently trades at around 1.1840, despite Wall Street’s sour tone.

The EU published August inflation figures, with the annual CPI confirmed at -0.2% as previously estimated. As for the US, the country has just published Initial Jobless Claims for the week ended September 11, which came in at 860K improving from 893K in the previous week but worse than the 850K anticipated. The country also published August Building Permits and Housing Starts, which increased by less than anticipated. Sour US data added to the dollar’s negative tone. This Friday, the EU will publish its July Current Account, while the US will unveil the preliminary estimate of the September Michigan Consumer Sentiment Index, foreseen at 75 from 74.1 in the previous month.

EUR/USD short-term technical outlook

The EUR/USD pair has corrected extreme oversold conditions, but the risk remains skewed to the downside, according to intraday technical readings. The 4-hour chart shows that the pair is trading below all of its moving averages, which remain all together in a 20 pips’ range, while technical indicators posted modest recoveries within negative levels. The pair is back to trade within familiar levels and would need to extend its advance beyond the 1.1880 price zone to have chances of rallying further.

Support levels: 1.1795 1.1750 1.1710

Resistance levels: 1.1840 1.1880 1.1915

View Live Chart for the EUR/USD

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