EUR/USD Forecast: US Dollar aims to extend gains

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0858

Financial markets are cautiously optimistic ahead of big names earning reports.
United States' upcoming first-tier data exacerbates the cautious stance.
EUR/USD poised to extend its slide, near-term support at 1.0820.

The US Dollar keeps grinding higher on Tuesday, resulting in EUR/USD falling to a fresh two-week low in the 1.0850 price zone. The Greenback benefits from a cautious mood ahead of earnings reports. Multiple S&P500 big names will report results this week, and investors eagerly await the outcome before compromising with a particular position. Stock markets trade mixed ahead of Wall Street’s opening, yet overall, it seems markets retain a certain dose of optimism after current United States (US) President Joe Biden stepped down from the presidential race. The news boosted the USD amid hopes Donald Trump could win and apply more market-friendly measures.

Meanwhile, European Central Bank (ECB) Vice President Luis de Guindos hit the wires. De Guindos said that while the level of uncertainty is “huge,” inflation is “practically” in line with policymakers’ projections. Furthermore, he added that September would be a much more convenient month for making decisions as officials will have more data.

The macroeconomic calendar remains scarce, with first-tier US figures scheduled for later in the week, exacerbating the quietness. The country will release the first estimate of the Q2 Gross Domestic Product (GDP) and fresh Personal Consumption Expenditures (PCE) Price Index data.

After the US opening, the Eurozone will publish the preliminary estimate of July Consumer Confidence, while the US will release June Existing Home Sales and the Richmond Fed Manufacturing Index for July.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of extending its slide. The pair keeps trading above all its moving averages, but technical indicators maintain their firmly downward slopes, approaching their midlines from above. Regarding moving averages, the 20 Simple Moving Average (SMA) advances above directionless 100 and 200 SMAs, but with its bullish strength moderating, suggesting buyers are not sure of adding on dips.

In the near term, and according to the 4-hour chart, the risk skews to the downside. Technical indicators resumed their slides after failing to regain positive levels, heading sharply lower below their midlines. At the same time, a bearish 20 SMA provides intraday resistance in the 1.0870 price zone, while EUR/USD approaches a bullish 100 SMA, acting as dynamic support at around 1.0820. Once below the latter, the bearish case will likely gain strength.

Support levels: 1.0820 1.0770 1.0725

Resistance levels: 1.0870 1.0910 1.0945

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.