EUR/USD Forecast: risking a new leg lower

The EUR/USD pair trades lower in range, retreating from a high of 1.1769 reached late Wednesday, as high yielding assets came back under pressure with the Asian opening, with equities in the region and Europe in the red. The decline is moderate as the pair is currently around 1.1725, yet with the pair below Friday's post-NFP low, and having extended its weekly decline down to 1.1688, the downward risk remains strong, at least short term.

There were no major macroeconomic releases in Europe, but the US will offer later today is PPI data for July, alongside with weekly unemployment claims. The star of the week, however, remains to be US July inflation, scheduled for this Friday. In the meantime, sentiment will have a saying on the pair's direction, as it did yesterday.

From a technical point of view, the 4 hours chart shows that a bearish 20 SMA keeps containing advances, now around the mentioned daily high, whilst technical indicators extended their declines within negative territory, supporting additional declines ahead. In the same chart, however, the pair is struggling around a still bullish 100 SMA. Nevertheless, a downward acceleration through 1.1690 should lead to a test of 1.1650, while below this last, the 1.1610/20 area is the next probable target.

Above the daily high, the pair can recover up to 1.1820, but it would take a break above this last to revert the ongoing negative tone, quite unlikely for today.

View live chart of the EUR/USD

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