EUR/USD Price Forecast: Bears aim to retest the year low
EUR/USD Current price: 1.0655
- The US Dollar benefits from the poor performance of Asian equities.
- United States and Canadian markets will be closed amid local holidays.
- EUR/USD bearish momentum continues, the year low at 1.0600 at sight.
The EUR/USD pair trades near a fresh multi-month low of 1.0649 posted on Monday as the US Dollar started the week with a strong footing. The poor performance of Asian equities added to the USD demand amid persistent risk aversion. Chinese shares edged lower as investors assessed local data. The country reported over the weekend that the October Consumer Price Index (CPI) fell by 0.3% on a monthly basis, advancing a modest 0.3% from a year earlier. The annual Producer Price Index (PPI) in the same period was down 2.9%.
Deflationary pressures on the Asian giant put into doubt recent government measures that could actually help revive the economy. European indexes, on the other hand, are generally firmer, albeit not enough to underpin high-yielding currencies.
Data-wise, the macroeconomic calendar has nothing relevant to offer. The Eurozone did not publish relevant data, while the United States (US) and Canadian markets will be closed amid local holidays, anticipating a quiet American afternoon.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair favors a bearish continuation towards the year low at 1.0600. Technical indicators head firmly south within negative levels at fresh multi-week lows yet still far from oversold territory. At the same time, EUR/USD develops below all its moving averages, with the 20 Simple Moving Average (SMA) accelerating south far above the current level while below the 100 and 200 SMAs.
In the near term, and according to the 4-hour chart, EUR/USD is oversold, yet without signs of downward exhaustion. The pair develops well below bearish moving averages, with the 20 SMA providing dynamic resistance at around 1.0740. Finally, the Momentum indicator heads south almost vertically after failing to overcome its midline, while the Relative Strength Index (RSI) indicator maintains its bearish slope at around 27.
Support levels: 1.0645 1.0600 1.0565
Resistance levels: 1.0685 1.0720 1.0760
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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.
