EUR/USD Forecast: Near-term decline on a break below 1.2120

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2162

The dollar advances within range on a sour market’s mood.
US Q3 GDP was upwardly revised to 33.4% from 33.1% YoY.
EUR/USD may extend its decline, but the long-term bullish trend remains intact.

The EUR/USD pair traded as high as 1.2256 on Monday, but changed course during US trading hours and settled near a daily low of 1.2155, as the dollar surged on persistent Brexit concerns. Currency pairs are quite volatile in thinned market’s conditions ahead of the Christmas Holidays, and profit taking is also playing a role in this week´s market’s action.

Germany published the GFK Consumer Confidence Survey, which printed at -7.3 in January, better than the -9.5 forecast. As for the US, the Q3 GDP annual reading was upwardly revised to 33.4%, although Consumer Confidence in the country plummeted to a four-month low of 88.6 amid resurging coronavirus cases in the US.

This Wednesday, the macroeconomic calendar will include the November Import Price Index, while the US will release November Durable Goods Orders, seen up 0.6% in the month. The country will also publish Initial Jobless Claims for the week ended December 18.

EUR/USD short-term technical outlook

The EUR/USD pair is bearish according to intraday charts, although the long-term trend remains firmly in place. The 4-hour chart shows that the pair was unable to hold on to gains above its 20 SMA that has turned bearish. A bullish 100 SMA provides dynamic support around 1.2120. Technical indicators have reached fresh weekly lows, reducing their bearish momentum but still pointing to a new leg lower.

Support levels: 1.2120 1.2080 1.2030

Resistance levels: 1.2205 1.2240 1.2280

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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