EUR/USD Price Forecast: A drop below 1.1600 is not ruled out

EUR/USD’s near-term outlook remains fragile in the low-1.1600s.
Key data in the USD-universe, US politics emerge as key drivers this week.

Pablo Piovano FXStreet

EUR/USD navigates within an inconclusive direction at the beginning of the week, although the sentiment is still biased towards further downside. Furthermore, the 1.1600 support could come under scrutiny in the next sessions.

In the meantime, the dollar is expected to remain in the centre of the debate for yet another week. Indeed, Tuesday’s presidential debate between Donald Trump and Joe Biden comes in with less than 40 days to the November elections, while the US labour market report will gather the bulk of attention in the end of the week along with another revision of the Q2 GDP and the ISM Manufacturing.

Closer to home, ECB’s President Christine Lagarde speaks later on Monday and Wednesday along with other ECB-speakers, while preliminary inflation figures in Euroland for the month of September will also be under the microscope.

Near-term Technical Outlook

EUR/USD navigates without a clear direction on Monday. The offered bias, however, appears unchanged and it will not be surprising to see sellers attempting to breach the key support at 1.1600 the figure in the next sessions, particularly following positive results from the US docket. Despite this view, a deeper retracement to the relevant contention region around 1.15 (March tops) is still unfavoured. On the other hand, the recently broken key area in the 1.1700 neighbourhood has now become the next target of significance of occasional bullish attempts.

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Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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