EUR/USD Forecast: US Retail Sales and the Federal Reserve could bring it back to life

EUR/USD Current Price: 1.1848

  • Market players are waiting for the US Federal Reserve monetary policy decision.
  • The German ZEW survey showed that Economic Sentiment improved in September.
  • EUR/USD is technically neutral ahead at around 1.1850, still needs to beat 1.1915.

The EUR/USD pair surged to 1.1900 early Tuesday, underpinned by the market’s optimism and encouraging European data. Germany published the September ZEW Survey, which surprised with positive figures, providing additional support to the shared currency. The Economic Sentiment in the country improved to 77.4 in September, while for the whole Union, it jumped to 73.9, both beating the market’s expectations. However, demand for the greenback returned in the American session, with the pair turning red and falling towards the current 1.1850 price zone. The lack of follow-through may have a direct correlation with the upcoming US Federal Reserve monetary policy announcement this Wednesday.

US data was mixed, as the NY Empire State Manufacturing Index for September printed at 17, beating the expected 6. August Industrial Production, however, posted a modest 0.4% advance from 3% in the previous month, while Capacity Utilization for the same month, improved as expected to 71.4% from 70.6% in July. Ahead of the Fed’s decision, the US will publish August Retail Sales, seen up 1% in the month.

EUR/USD short-term technical outlook

The EUR/USD pair has trimmed its weekly gains, trading at the same level where it left on Friday. It’s technically neutral, according to the 4-hour chart, as technical indicators retreated to turn flat around their midlines. Moving averages in the mentioned time frame remain in a tight range and lacking directional strength. Market players will likely wait for the Fed’s announcement before taking action, with further range-trading expected ahead of the event. The main resistance level is 1.1915, where the pair topped last week, and it also has the 61.8% retracement of its September decline.

Support levels: 1.1800 1.1750 1.1710

Resistance levels: 1.1880 1.1915 1.1960  

View Live Chart for the EUR/USD


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