EUR/USD Forecast: Lagarde adds a nail to EUR’s coffin

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1383

ECB President Lagarde said that trimming financial facilities would do more harm than good.
US Treasury yields picked up at the start of the week, reflecting the market’s concerns.
EUR/USD trades at fresh 2021 lows and is poised to fall further.

The EUR/USD pair fell to a fresh 2021 low of 1.14379 and trades nearby ahead of Wall Street’s close, as comments from European Central Bank President Christine Lagarde undermined demand for the shared currency. Mrs Lagarde added nothing new to what the market already knew, as she said that any tightening measure now would cause more harm than good to the economy. Additionally, US data was upbeat, as the country published the NY Empire State Manufacturing Index, which improved to 30.9 in November from 19.8 previously.

Meanwhile, European indexes closed in the green, leading to a strong opening in Wall Street. However, US government bond yields jumped north, pushing equities lower. The yield on the 10-year US Treasury note peaked at 1.62%, while that on the 30-year note reached a two-week high.

On Tuesday, the EU will publish the second estimate of its Q3 Gross Domestic Product, foreseen unchanged at 2.2% QoQ. More relevant, the US will release October Retail Sales, foreseen up 0.7% MoM. An upbeat reading may push the greenback further up, not only against the EUR.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of falling further. The daily chart shows that technical indicators have resumed their declines near oversold readings, reflecting the selling interest’s strength. Additionally, the pair keeps developing below bearish moving averages, with the 20 SMA currently at around 1.1575.

In the near term, and according to the 4-hour chart, the risk is skewed to the downside. Technical indicators have corrected oversold conditions before resuming their declines, with the Momentum rejected from around its 100 level and the RSI indicator heading firmly lower at fresh multi-month lows. Meanwhile, the 20 SMA has extended its slide far below the longer ones and now acting as dynamic resistance near the daily high.

Support levels: 1.1350 1.1310 1.1265

Resistance levels: 1.1425 1.1470 1.1515

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD looks offered below 1.1900

EUR/USD keeps its bearish tone unchanged ahead of the opening bell in Asia, returning to the sub-1.1900 region following a firmer tone in the US Dollar. Indeed, the pair reverses two consecutive daily gains amid steady caution ahead of Wednesday’s key US Nonfarm Payrolls release.

GBP/USD slips back to daily lows near 1.3640

GBP/USD drops to daily lows near 1.3640 as sellers push harder and the Greenback extends its rebound in the latter part of Tuesday’s session. Looking ahead, the combination of key US releases, including NFP and CPI, alongside important UK data, should keep the pound firmly in focus over the coming days.

Gold the battle of wills continues with bulls not ready to give up

Gold remains on the defensive and approaches the key $5,000 region per troy ounce on Tuesday, giving back part of its recent two day. The precious metal’s pullback unfolds against a firmer tone in the US Dollar, declining US Treasury yields and steady caution ahead of upcoming key US data releases.

Bitcoin's downtrend caused by ETF redemptions and AI rotation: Wintermute

Bitcoin's (BTC) fall from grace since the October 10 leverage flush has been spearheaded by sustained ETF outflows and a rotation into the AI narrative, according to Wintermute.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.