EUR/USD Forecast: Growth concerns weigh on the shared currency

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1705

The shared currency remained under pressure amid concerns about economic growth.
US Federal Reserve’s Powell said the US economy remains resilient throughout the crisis.
EUR/USD is trading at fresh two-month lows and still biased lower.

The EUR/USD pair plunged below the 1.1700 level this Tuesday, trading as low as 1.1691, a level last seen in July. Concerns about a second coronavirus wave hitting Europe maintained the shared currency under pressure, despite stocks pared their bleeding and better-than-expected EU data. The preliminary estimate of September Consumer Confidence printed at -13.9 from -14.7 in August.

In the US, Fed’s Chair Powell testified before a House special commission, noting that the US economy has remained resilient and that the banking system has held up well during the ongoing crisis. However, he also said that further economic progress would depend if they can control the virus and most likely will need fiscal support.

This Wednesday, Markit will release the preliminary estimates of its September PMIs for the EU and the US. Manufacturing output is generally seen better than in August, while services activity is seen improving in the EU but deteriorating in the US. Powell will testify

EUR/USD short-term technical outlook

The EUR/USD pair is trading around the 1.1700 level, maintaining the bearish bias. The 4-hour chart shows that it remains below bearish moving averages, with the 20 SMA accelerating south, currently around 1.1800. Technical indicators, in the meantime, have bounced modestly from oversold levels, but lack directional strength. The risk remains skewed to the downside, with renewed selling interest below 1.1695 anticipating another leg south for this Wednesday.

Support levels: 1.1695 1.1660 1.1620

Resistance levels: 1.1725 1.1760 1.1800

View Live Chart for the EUR/USD

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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.

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