EUR/USD Forecast: lower highs support the case of a bearish correction

EU macroeconomic calendar empty, US housing and employment data up next.
EUR/USD short-term bearish pressure could ease above 1.2230.

Valeria Bednarik FXStreet

The EUR/USD pair's behavior has been quite repetitive these last few days, with the greenback plummeting ahead of Wall Street´s close, and quickly changing course afterward, to reach higher highs daily basis against its European rival in Asian trading hours. The pair fell down to 1.2164 after surging to 1.2287 in a couple of hours, now struggling to regain the 1.2200 level. The EU macroeconomic calendar has nothing to offer today, but the US will release some interesting figures, including housing data for December, weekly jobless claims and the Philadelphia Fed Manufacturing Survey for January, this last expected at 25.0 from the previous 26.2.

The short term-technical picture has turned slightly negative, as the price finally broke below its 20 SMA, now flat around 1.2230, providing an immediate resistance. Technical indicators entered bearish territory once the pair broke lower, now losing their momentum downward, pretty much neutral at the time being as the RSI stands pat around 53. Daily basis, the lower highs, and lower lows also support the case of a downward extension.

A recovery above the mentioned 20 SMA should lead to an advance up to the 1.2280 region, while beyond this last, the weekly high at 1.2322 is the next probable target. Below the daily low, on the other hand, the decline would likely extend toward the 1.2110/20 price zone.

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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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