EUR/USD Forecast: Nearing October low at 1.1688

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1719

Risk-off fuels equities’ sell-off in favor of the American currency.
A light macroeconomic calendar exacerbates sentiment-related trading.
EUR/USD is on its way to break below the 1.1700 level and reach fresh monthly lows.

Speculative interest changed its mind on fears and rushed into the greenback this Wednesday. The EUR/USD pair is trading sharply lower, approaching the 1.1700 threshold. The American currency is up against all of its high-yielding rivals, amid mounting fears that national lockdowns are coming to Europe.

The number of new coronavirus cases in the Union these days continues to increase to record levels which largely surpass the peaks from March/April. Curfews have proved insufficient to slow contagions, and harsh restrictive measures are coming to several countries. Equities in the Union plunged, dragging alongside Wall Street’s futures.

The macroeconomic calendar has little to offer this Wednesday, as Germany published the September Import Price Index, which beat expectations, although remained negative yearly basis. The US MBA Mortgage Applications for the week ended October 23 came in at 1.7%, improving from -0.6%. The September Trade Balance posted a deficit of $79.37B, better than the previous $-83.11B.

EUR/USD short-term technical outlook

The EUR/USD pair trades at daily lows in the 1.1720 area, as the dollar keeps strengthening, and approaches this October low at 1.1688. The 4-hour chart shows that the pair has accelerated its decline after breaking below its larger moving averages, while technical indicators head firmly lower near oversold readings, all of which supports further declines ahead.

Support levels: 1.1680 1.1640 1.1600

Resistance levels: 1.1760 1.1800 1.1845

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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