EUR/USD Forecast: Nearing 1.0900 amid dismal EU data, risk-off

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0938

EU’s final Markit Manufacturing PMI at 33.4 in April.
Wall Street set to open lower amid mounting tensions between de US and China.
EUR/USD retains its positive bias in the short-term, bullish momentum limited.

The EUR/USD pair gapped lower at the weekly opening, as the market kick-started Monday in risk-off mode. The pair’s decline was evident during the Asian session, although the pair found some stability around 1.0930 during London trading hours, after bottoming at 1.0923. Data coming from Europe was mixed, as the final version of the German April Markit Manufacturing PMI was upwardly revised to 34.5, although the one for the whole Union came down to 33.5. Also, the EU Sentix Investor Confidence index plunged to -41.8 in May, much worse than the -33.5 anticipated.

The US will publish today the ISM-NY Business Conditions index for April, previously at 12.9, and March Factory Orders, seen down by 9.8% when compared to a month earlier. Meanwhile, the market’s sentiment remains sour, with European indexes sharply down and Wall Street futures poised to open with losses. The catalyst for the negative tone is US President Trump, as he continues to blame China for the coronavirus outbreak, also menacing to end the trade deal, as the Asian country is not buying the agreed quotas.

EUR/USD short-term technical outlook

The 4-hour chart for the EUR/USD pair showed that it bounced from around a bullish 20 SMA, which continues to advance above the larger ones. The 100 and 200 SMA converge directionless at around 1.0880, providing dynamic support. Technical indicators in the meantime, remain within positive levels but lost their directional strength. Overall, the downside seems limited as long as the pair holds above the mentioned 1.0880 level.

Support levels: 1.0880 1.0830 1.0795

Resistance levels: 1.0920 1.0950 1.0995

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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