EUR/USD Forecast: Unconvinced bulls may soon give up

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1934

German’s GFK Consumer Confidence Survey improved in July to -0.3 from -6.9 previously.
The US June Michigan Consumer Sentiment Index was downwardly revised to 85.5.
EUR/USD could turn bearish amid the lack of follow-through beyond 1.1920.

The EUR/USD pair closed the week with gains in the 1.1930 price zone, consolidating on Friday for a third consecutive day. The American dollar shed ground at the beginning of the week, correcting the extreme overbought conditions achieved post-Fed, but the slide lacked follow-through. The pair advanced to 1.1974 as risk appetite underpinned high-yielding currencies, with Wall Street advancing to record highs. The greenback recovered ahead of the close, helped by soaring US government bond yields.

On Friday, Germany published the GFK Consumer Confidence Survey, which improved in July to -0.3 from -6.9 in the previous month. The US released the May Core Personal Consumption Expenditures Price Index, which advanced to 3.4% YoY as expected, reviving concerns about the US mounting inflationary pressures. The June Michigan Consumer Sentiment Index was downwardly revised to 85.5. The macroeconomic calendar has nothing to offer on Monday.

EUR/USD short-term technical outlook

The EUR/USD pair settled a handful of pips above the 61.8% retracement of the March/May rally at around 1.1920. The daily chart shows that the risk is skewed to the downside, as the pair is developing below all of its moving averages, with the 20 SMA accelerating south above the longer ones. Technical indicators have corrected the extreme oversold reading witnessed in the previous week but resumed their declines within negative levels. In the 4-hour chart, a mildly bullish 20 SMA provided dynamic support, but the pair is currently pressuring it. Technical indicators turned lower but remain within neutral levels. A break below the mentioned Fibonacci support level should confirm a bearish extension in the near-term.

Support levels: 1.1920 1.1885 1.1840

Resistance levels: 1.1980 1.2025 1.2070

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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