EUR/USD Forecast: Waiting for central bankers

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1061

The absence of macroeconomic releases and first-tier events later this week kept the pair on-hold.
Trade tensions persist, investors need definitions before the weekend.
EUR/USD neutral-to-bearish in the short-term, 1.1030 critical support.

The EUR/USD pair is ending Monday unchanged from its Friday’s close, as the absence of relevant data and first-tier events taking place later this week put speculative interest in cautious mode. The American currency shed some ground amid concerns the US and China may escalate their trade war rather than solve it. Also, investors are waiting for the Federal Reserve and the ECB, both scheduled to have monetary policy meetings this week.

In the macroeconomic front, Germany unveiled its October Trade Balance, which posted a trade surplus of €20.6B. Imports in the month were unchanged against a 0.1% decline expected, while exports increased by 1.2%, much better than the -0.3% forecast. The US didn’t provide fresh data. This Tuesday, Germany will publish its December ZEW Survey, with the Economic Sentiment seen improving just modestly in the country, but deteriorating further in the whole EU.

EUR/USD short-term technical outlook

The EUR/USD pair has recovered above the 38.2% retracement of its October rally at 1.1065 but was unable to extend its gains beyond it. In the 4-hour chart, the is stuck between flat moving averages, with the 20 SMA providing an immediate short-term resistance at 1.1085. Technical indicators have turned marginally lower just below their midlines, lacking strength enough to confirm further declines ahead. A critical support level is 1.1030, the 50% retracement of the mentioned rally, with a break below it, probably exacerbating selling interest.

Support levels: 1.1030 1.0990 1.0940

Resistance levels: 1.1085 1.1120 1.1150

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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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