EUR/USD Forecast: Pressure remains ahead of another round of Powell
EUR/USD Current price: 1.1587
- US Q2 Gross Domestic Product was confirmed at 6.7%, slightly better than anticipated.
- US government bond yields continue to consolidate near monthly highs.
- EUR/USD is bearish, but extreme oversold conditions hint at a possible correction.
The EUR/USD pair remains on the backfoot, accelerating its slide below the 1.1600 figure. So far, the pair has set a fresh 2021 low of 1.1567, as demand for the American currency in a tumultuous scenario persists. Stocks remain under pressure while government bond yields consolidate gains, with the yield on the 10-year US Treasury note holding above 1.50%.
European data failed to impress, adding pressure on the shared currency. German inflation remained path in September according to preliminary estimates, below the 0.1% expected. The unemployment change in the country resulted at -30K, also missing the market’s expectations.
US data was mixed, as Initial Jobless Claims were once again up, printing at 363K in the week ended September 24. The Gross Domestic Product was confirmed at 6.7% in Q2, slightly better than anticipated. Finally, core Personal Consumption Expenditures prices met expectations with 6.1%. US Federal Reserve Chair Jerome Powell will testify again with US Treasury Secretary Janet Yellen before Congress.
EUR/USD short-term technical outlook
The EUR/USD pair trades in the 1.1580 price zone, oversold but bearish in the near term. The 4-hour chart shows that technical indicators have resumed their declines and keep heading south despite being at extreme levels, while the 20 SMA further fell below the longer ones and above the current level. Further declines could be expected on a break below 1.1560, although chances of a corrective advance increased.
Support levels: 1.1560 1.1520 1.1485
Resistance levels: 1.1640 1.1680 1.1725
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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.
