EUR/USD Forecast: Pressure mounts, critical support at 1.2060

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2103

EU inflation was confirmed at -0.3% YoY in December.
Market players await Joe Biden’s inauguration and pre-announced executive orders.
EUR/USD is neutral-to-bearish in the near term, Fibonacci support at 1.2060.

The American dollar catches a bid ahead of Wall Street’s opening, pushing EUR/USD sub-1.2100 after the pair rose to 1.2157 earlier in the day. The greenback keeps moving alongside Treasury yields and equities, these last, retreating from intraday highs but still confined to familiar levels around their daily openings.

The EU published the final versions of its December inflation, which was confirmed at -0.3% YoY. The US macroeconomic calendar has little to offer, and so far published MBA Mortgage Applications for the week ended January 15, which were down by 1.9%.

Investors are now waiting for Joe Biden’s inauguration, and the executive orders he announced for his first day in the office. He plans to revert some of Trump’s measures, although the only reference to fiscal policy was made by Janet Yellen. Decisions on taxes or international trade may impact financial markets. Also, political turmoil could introduce some noise.

EUR/USD short-term technical outlook

The EUR/USD pair is under mild-pressure, but lacking clear directional strength, trading between Fibonacci levels. In the 4-hour chart, the pair is resting just above a bearish 20 SMA, while below the larger ones, which maintain their bullish slopes. Technical indicators turned south, the Momentum holding within positive levels but the RSI already at 45, skewing the risk to the downside. A steeper decline could be expected on a break below 1.2060, the 38.2% retracement of the November/January rally.

Support levels: 1.2060 1.2020 1.1970

Resistance levels: 1.2125 1.2170 1.2225

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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