EUR/USD Forecast: Risk-related sentiment leading the way

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1795

Equities bouncing of lows are providing modest support to the common currency.
US data missed expectations, unemployment claims hit 893K in the week ended September 11.
EUR/USD biased lower but receding demand for the greenback may keep it afloat.

The EUR/USD pair reached a fresh September monthly low of 1.1736 this Thursday, as the greenback appreciated sharply following a dovish Fed spurring risk-off. US policymakers maintained their monetary policy on hold and repeated the pledge to do whatever is necessary to support the economy. Yet, at the same time, they noted economic progress hinting no action required at the time being. Equities came under strong selling pressure, although European indexes are now bouncing from intraday lows, trimming most of their early losses, putting the greenback under pressure.

The EU published August inflation figures, with the annual CPI confirmed at -0.2% as previously estimated. Core annual inflation also met the previous estimate printing at 0.4%. As for the US, the country has just published Initial Jobless Claims for the week ended September 11, which came in at 860K improving from 893K in the previous week but worse than the 850K anticipated. The country also published August Building Permits and Housing Starts, which increased by less than anticipated.

EUR/USD short-term technical outlook

The EUR/USD pair trades around the 1.1800 level, biased lower according to intraday technical readings. The 4-hour chart shows that it remains below all of its moving averages, with the 20 SMA gaining bearish strength, although all of them confined to a tight range. Technical indicators, in the meantime, corrected oversold readings but turned back south within negative levels. The risk is skewed to the downside, with lower lows expected on renewed selling pressure below 1.1760, the immediate support.

Support levels: 1.1760 1.1710 1.1665

Resistance levels: 1.1830 1.1875 1.1915

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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