EUR/USD Forecast: downward pressure, 1.1120 critical

Risk appetite came back during the Asian session, as the Nikkei 225 surged over 1,000 points, in spite of tepid data in the region and a slide in the Shanghai Composite after the long holiday. Chinese Trade Balance released overnight showed yet another drop in exports and imports, with the first down by 6.6% in January, and the second down 14.4%, down by fifteen month in-a-row. Anyway, European stocks opened strongly higher, leading to an EUR/USD decline below the 1.1200 level.

The EUR will release its trade balance data later today, while ECB's President Mario Draghi is due to testify on monetary policy before the European Parliament's Economic and Monetary Affairs Committee, in Brussels. US markets will remain closed in observance of Presidents' Day, and no data will be released during the session.

View the Live chart of the EUR/USD

Technically, the EUR/USD pair is trading at its lowest since last Wednesday in the 1.1180 region, and the 4 hours chart suggest further declines are likely, given that the price is below a bearish 20 SMA, whilst the technical indicators head sharply lower within bearish territory. Should the price extend its decline below 1.1160, the next support and critical target comes at 1.1120, where some buying interest is expected to give battle. If the level is broken, however, 1.1050 is the next probable bearish target.

The 1.1220 region stands now as the immediate resistance, with a recovery above it favoring a steady advance up to 1.1260, where the pair closed last Friday. Some follow through beyond it should lead to a retest of the 1.1300 region, en route to past week high of 1.1375.

Latest updates on the EUR/USD Forecast

Share: Analysis feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.