EUR/USD Forecast: Under mild selling pressure as mood sours

EUR/USD Current price: 1.0858

• Better-than-anticipated European data provided no support to the Euro.
• The American session will feature another batch of Federal Reserve speakers.
• EUR/USD extends the consolidative phase and loses upward potential.

The EUR/USD pair keeps trading lifeless around the 1.0860 level on Tuesday, confined to a tight 25 pips intraday range. The market mood soured after Wall Street’s mixed close in the first trading day of the week, with Asian and European indexes losing ground and putting mild pressure on their American counterparts ahead of the opening.

The US Dollar trades with a soft tone despite the tepid mood, while the Euro remains depressed despite generally encouraging European data. On the one hand, Germany released the April Producer Price Index (PPI), which contracted by 3.3% YoY against expectations of a 3.2% slide. On a monthly basis, the PPI advanced 0.2%, matching expectations and the March figure.

Meanwhile, the EU unveiled the March Current Account, which posted a wider-than-anticipated seasonally adjusted surplus of €35.8 billion, while the Trade Balance for the same month rose to €17.3 billion. The American session will feature multiple Federal Reserve (Fed) speakers and no other relevant macroeconomic data.

EUR/USD short-term technical outlook

The EUR/USD pair daily chart shows receding bullish potential, albeit an upcoming decline remains out of the picture. The pair trades above all its moving averages, with the 20 Simple Moving Average (SMA) extending its advance and approaching a flat 200 SMA, the latter around 1.0785. The 100 SMA, in the meantime, stands pat at 1.0810. Finally, technical indicators remain well into positive territory, lacking clear directional strength.

In the near term, and according to the 4-hour chart, EUR/USD is neutral. The pair keeps seesawing just below a mildly bearish 20 SMA but holds far above a bullish 100 SMA. Technical indicators, in the meantime, remain attached to their midlines for a second consecutive day. A steeper decline seems likely on a break below 1.0830, the immediate support level.

Support levels: 1.0830 1.0795 1.0750

Resistance levels: 1.0890 1.0920 1.0960