EUR/USD Forecast: Euro could struggle to rebound ahead of key macroeconomic events

EUR/USD stays on the back foot after closing the previous week in the red.
Technical outlook suggests that sellers look to retain control.
Investors could refrain from taking large positions ahead of this week's important events.

Eren Sengezer FXStreet

EUR/USD registered losses for the second consecutive week but managed to stabilize at around 1.0750 early Monday. The pair's technical outlook shows that the bearish bias stays intact. Investors, however, could refrain from betting on an extended US Dollar (USD) rally ahead of this week's key macroeconomic data releases and central bank meetings.

The upbeat November jobs report from the US helped the USD hold its ground ahead of the weekend on Friday. Nonfarm Payrolls rose by 199,000, more than the market expectation for an increase of 180,000, and the Unemployment Rate edged lower to 3.7% from 3.9%. The benchmark 10-year US Treasury bond yield gained nearly 2% after the data and the USD Index rose above 104.00.

Early Monday, the cautious market stance allows the USD to stay resilient against its rivals. At the time of press, US stock index futures were down between 0.1% and 0.2% on the day.

On Tuesday, the Consumer Price Index (CPI) data from the US will be watched closely by market participants ahead of the Federal Reserve's policy announcements on Wednesday.

Later in the week, the European Central Bank (ECB) will conduct the last monetary policy meeting of the year.

EUR/USD Technical Analysis

EUR/USD closed the last six 4-hour candles below the 200-period Simple Moving Average (SMA) and the Relative Strength Index (RSI) indicator failed to recover above 40, reflecting the lack of buyer interest. 1.0700 (psychological level, Fibonacci 61.8% retracement of the latest uptrend) aligns as important support before 1.0660 (static level).

On the upside, immediate resistance is located at 1.0760 (Fibonacci 50% retracement, 20-period SMA) ahead of 1.0780 (200-period SMA) and 1.0820 (Fibonacci 38.2% retracement).

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.

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