EUR/USD Forecast: Under pressure, waiting for the US return
EUR/USD Current Price: 1.1867
- A holiday in the US kept volumes at their lows and majors within tight ranges.
- EU’s Sentix Investor Confidence improved to 29.8 in July from 28.1 previously.
- EUR/USD is neutral in the near-term, with the risk skewed to the downside.
The EUR/USD pair ended Monday trading in the 1.1860 price zone, unchanged from Friday’s close. The American dollar aimed higher at the weekly opening, but gains were limited and quickly reverted. Nevertheless, the subsequent decline was also contained amid reduced volumes due to holidays in the US. The market’s sentiment was mostly sour, as the spread of new coronavirus variants put at doubt the return to normal. Concerns are so far limited, but for sure weigh on sentiment.
Meanwhile, macroeconomic figures continue to reflect progress. Markit published the final versions of its June Services PMIs for the EU. The German Index was downwardly revised to 57.5, while that of the whole Union was better than anticipated, reaching 58.3. The EU published July’s Sentix Investor Confidence, which improved from 28.1 to 29.8 but missed the 30 expected.
On Tuesday, Germany will publish May Factory Orders, seen up by 5% MoM, and the July ZEW survey, expected to show that the Economic Sentiment deteriorated in the country. The EU will release May Retail Sales, foreseen up 4.1% MoM, while the US will release the official ISM Services PMI, previously at 64.
EUR/USD short-term technical outlook
The EUR/USD pair has spent the day consolidating in a tight range, but the risk remains skewed to the downside, at least as long as it stands below the 1.1920 Fibonacci resistance level. The 4-hour chart shows that the pair is holding a handful of pips above a mildly bearish 20 SMA, while the longer ones keep heading south well above the current level, indicating persistent selling interest. Technical indicators are stuck around their midlines without clear directional strength. The bearish case will be firmer should the pair slide below 1.1840, the immediate support.
Support levels: 1.1840 1.1795 1.1750
Resistance levels: 1.1920 1.1980 1.2025
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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.
