EUR/USD Price Forecast: Battling to retain the 1.0400 mark

EUR/USD Current price: 1.0400

• ECB Governing Council member Knot hit the wires during European trading hours.
•  United States data was mixed, failed to make a relevant impact on the USD.  
• EUR/USD advances in thin trading conditions, faces resistance at around 1.0470.

The EUR/USD pair seesawed between gains and losses on Monday, finally settling at around the 1.0400 mark, posting a modest intraday slide. The US Dollar (USD) gained the most early in the American session as the market mood soured, with US indexes posting substantial slides, yet not enough to alter the dominant bullish trends.

Data-wise, investors kept an eye on Spanish inflation, as the Harmonized Index of Consumer Prices (HICP) unexpectedly rose to 2.8% on a yearly basis in December, according to preliminary estimates, reinforcing the idea of gradual interest rate cuts in the Eurozone.

Also, European Central Bank (ECB) Governing Council member Klaas Knot hit the wires and noted that “there is a chance that the Chinese will start offering their goods in Europe at lower and lower prices” should the upcoming United States (US) administration goes ahead with imposing fresh tariffs on Chinese products.

Across the pond, the United States (US)  published the December Chicago Purchasing Managers’ Index, which resulted at 36.9, worse than the 42.5 expected and the previous 40.2. Also, the Dallas Fed Manufacturing Business Index in the same month improved to 3.4 from -2.7 in November. Finally, Pending Home Sales were up 6.9% in November.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of falling further. In the daily chart, the pair keeps developing below all its moving averages, with the 20 Simple Moving Average (SMA) providing dynamic resistance at around 1.0470. Technical indicators, in the meantime, have turned marginally lower within negative levels,  reflecting mounting selling interest.

In the near term, and according to the 4-hour chart, the pair turned neutral-to-bearish. It trimmed intraday gains with a large bearish candle, settling afterwards below a now flat 20 SMA. Attempts to advance beyond the latter have been rejected by sellers. At the same time, the 100 and 200 SMAs maintain their bearish slopes far above the shorter one. Finally, technical indicators have turned flat below their midlines, in line with a retest of the intraday low in the upcoming sessions.

  Support levels: 1.0370 1.0330 1.0290

Resistance levels: 1.0440 1.0470 1.0510