EUR/USD Forecast: Higher in range amid a better market mood

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1728

Markit September PMIs showed a sharp deceleration in economic expansion.
US weekly unemployment claims jumped to 351K in the week ended September 17.
EUR/USD remains on the back-foot despite easing demand for the USD.

The EUR/USD pair recovered some ground this Thursday, although the advance is limited, with the pair currently trading in the 1.1720 price zone. The dollar retreated as stocks rallied on risk appetite, following news that the Chinese Evergrande property company will likely be restructured into three separate entities to prevent a default and protect the country’s financial system.

Meanwhile, news hit the wire about ECB policymakers seeing the risk of inflation exceeding projections, which underpins the case of tapering in the EU, despite the cautious stance from Lagarde & Co.

Data coming from the Euro Area was quite disappointing, probably the reason why the pair was unable to advance further. Markit published the preliminary estimates of its September PMIs. German and EU readings held into expansion territory, but contracted from their August readings, also missing the market’s expectations.

As for the US, the country just released Initial Jobless Claims for the week ended September 16, which printed at 351K, worse than anticipated. Later into the US session, Markit will release the preliminary September PMIs, while the country will publish the official ISM figures.

EUR/USD short-term technical outlook

The EUR/USD pair is neutral-to-bearish in the near term, and according to the 4-hour chart. It is currently a handful of pips above a directionless 20 SMA while below the longer ones. Technical indicators have lost bullish strength after nearing their midlines, with the Momentum flat around 100 and the RSI advancing modestly at around 48. Bulls will have better chances if the pair advances beyond 1.1755, the 61.8% retracement of its latest daily advance.

Support levels: 1.1700 1.1660 1.1620

Resistance levels: 1.1755 1.1780 1.1830

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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