EUR/USD Forecast: Euro could encounter strong support at 1.0850
- EUR/USD reversed its direction after climbing to fresh multi-month highs above 1.0950.
- 1.0850 aligns as key near-term support for the pair.
- US economic docket will feature Durable Goods Orders and Jobless Claims data.
After rising to its highest level since early August above 1.0950 on Tuesday, EUR/USD turned south and closed the day in negative territory. Early Wednesday, the pair stays on the back foot and trades in negative territory below 1.0900.
The minutes of the Federal Reserve's (Fed) October 31-November 1 policy meeting allowed the US Dollar (USD) find a foothold late Tuesday following the bearish start to the week. The publication showed that policymakers noted that further policy tightening would be appropriate if progress toward the inflation goal was insufficient.
Meanwhile, European Central Bank (ECB) President Christine Lagarde said that they expect headline inflation to rise again slightly in the coming months and added that it was not the time to start declaring victory. These comments helped EUR/USD limit its losses.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.29% | 0.26% | 0.16% | 0.29% | 0.77% | 0.58% | 0.26% | |
| EUR | -0.28% | -0.03% | -0.12% | 0.01% | 0.51% | 0.29% | -0.04% | |
| GBP | -0.25% | 0.04% | -0.09% | 0.05% | 0.53% | 0.33% | -0.01% | |
| CAD | -0.16% | 0.13% | 0.10% | 0.14% | 0.62% | 0.42% | 0.09% | |
| AUD | -0.29% | -0.01% | -0.05% | -0.13% | 0.50% | 0.29% | -0.04% | |
| JPY | -0.79% | -0.49% | -0.54% | -0.60% | -0.47% | -0.21% | -0.53% | |
| NZD | -0.59% | -0.29% | -0.33% | -0.42% | -0.28% | 0.20% | -0.33% | |
| CHF | -0.24% | 0.06% | 0.01% | -0.08% | 0.06% | 0.55% | 0.34% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Later in the day, October Durable Goods Orders will be featured in the US economic docket and the Department of Labor will publish the weekly Initial Jobless Claims data. Durable Goods Orders are forecast to contract by 3.1% and the number of first-time applications for unemployment benefits is expected to decline to 225,000 in the week ending November 18 from 231,000.
A significant drop in the weekly claims data could provide a boost to the USD and weigh on EUR/USD in the early American session.
US markets will remain closed on Thursday in observance of the Thanksgiving holiday and the trading action could turn subdued in the American session.
EUR/USD Technical Analysis
EUR/USD returned within the ascending regression channel and the Relative Strength Index (RSI) indicator on the 4-hour chart declined slightly below 50, suggesting that downward correction could continue in the near term.
On the downside, 1.0850 (Fibonacci 50% retracement of the July-October downtrend) aligns as key support for EUR/USD before 1.0825 (50-period Simple Moving Average (SMA), mid-point of the ascending channel) and 1.0800 (psychological level, static level).
First resistance is located at 1.0900 (upper limit of the ascending channel, psychological level) ahead of 1.0950 (Fibonacci 61.8% retracement) and 1.1000 (psychological level, static level).
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Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
