EUR/USD Forecast: Lower lows, 1.0770 next critical support

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0800

German ZEW Survey much worse than expected, US data beat expectations.
Coronavirus takes its toll on the economy, markets in risk-off mode.
EUR/USD to accelerate its decline once below 1.0770, the immediate support.

The shared currency is trading at fresh multi-year lows against its American rival, undermined by weak local data and renewed risk aversion. The coronavirus outbreak has resulted in Apple issuing a warning about sales, not meeting expectations as the company experiences production issues while multiple stores have been closed in China. In the data front, Germany released the February ZEW Survey, which came in much worse than anticipated, as the Economic Sentiment in the country contracted to 8.7 from 26.7. The assessment of the current situation was down to -15.7. For the whole Union, the sentiment was at 10.4, far below the 30 expected.

The US just released the February NY Empire State Manufacturing Index, which came in at 12.9, beating the expected 5 and above the previous 4.8. The country will release the NAHB Housing Market Index for February, and December TIC Flows later today.

Meanwhile, equities are trading in the red worldwide, with Wall Street poised to open with substantial losses. Save-haven assets are on the run, with government debt yields falling and gold prices at two-week highs and not far from the year top.

EUR/USD short-term technical outlook

The EUR/USD pair is trading around 1.0800, its lowest since April 2017. The 4-hour chart shows that an intraday advance was rejected by sellers around a bearish 20 SMA, which stands at 1.0840 providing immediate resistance. Technical indicators head firmly lower within negative levels, the RSI entering oversold territory. The pair is at a brink of breaking below 1.0770 a strong static support level. A steeper decline is expected if the pair break below this last.

Support levels: 1.0770 1.0725 1.0690

Resistance levels: 1.0840 1.0885 1.0910

View Live Chart for the EUR/USD

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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