EUR/USD Forecast: 1.0460 first, parity then

The American dollar staged a strong comeback this week, particularly against a weaker EUR, erasing most of the last 3-week gains of the common currency. In fact, the pair aims to close the week well below the 61.8% retracement of these latest weeks advance at 1.0688, a critical resistance level for the upcoming days. 

The third time was not a charm in this case, as the pair faltered in the 1.1000/1.1050 area, before resuming its slide. The weekly chart shows that the technical indicators turned back south after correcting extreme oversold readings, whilst the moving averages remain way far above the current levels to be taken into account, albeit the 20 SMA maintains a sharp bearish tone. In the daily chart, the 20 SMA stands around the 38.2% retracement of the mentioned decline around 1.0830, whilst the technical indicators maintain a bearish tone below their mid-lines, all of which supports additional declines. 

As long as the 1.0690 area contains the upside, the pair should be expected to maintain the bearish strength, with a break below 1.0550, exposing the pair to a retest of 1.0461, this year low. If the level gives up, the next bearish target comes at 1.0320, albeit market players will be eyeing parity as the next probable target. 

Above 1.0700, on the other hand can favor additional gains up to the 1.0830 area, with this last expected to contain the upside next week. 

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