EUR/USD Price Forecast: Bulls pause ahead of critical US data

EUR/USD Current price: 1.0396

• The Eurozone Harmonized Index of Consumer Prices rose 2.4% YoY in December.
• The US ISM Services PMI is foreseen at 53.3 in December, improving from 52.1.
• EUR/USD holds on to higher ground, but bulls hesitate.

The EUR/USD pair retains most of its Monday’s gains and trades a handful of pips below the 1.0400 mark on Tuesday after peaking for a second consecutive day in the 1.0430 region. The US Dollar (USD) remains on the back foot amid a better market mood and as speculative interest pauses ahead of key macroeconomic United States (US) releases.

Meanwhile, the Eurozone released the Harmonized Index of Consumer Prices (HICP), which rose 2.4% year-over-year (YoY) in December, higher than the  2.2% posted in November, yet in line with the market’s expectations. The core HICP increased by 2.7% YoY in the same period, matching expectations and the November reading. The US calendar includes the November Goods and Services Trade Balance and the official December ISM Services Purchasing Managers’ Index (PMI), the latter foreseen at 53.3 after printing at 52.1 in November.

The US will also release the November JOLTS Job Openings report ahead of the ADP Employment Change report on Wednesday and the Nonfarm Payrolls report on Friday.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair holds on to modest gains but once again met sellers around a bearish 20 Simple Moving Average (SMA). Even further, the 100 SMA is crossing below the 200 SMA in the 1.0800 region, usually anticipating additional slides ahead. On the other hand, technical indicators have corrected oversold conditions but turned flat within negative levels, suggesting limited buying interest.

In the near term, and according to the 4-hour chart, the EUR/USD pair seems poised to extend its slide. It has been unable to extend gains beyond a bearish 100 SMA, while the 200 SMA gains downward traction above it. Technical indicators, in the meantime, retreat from overbought readings, although they hold well above their midlines. A mildly bullish 20 SMA provides near-term support at around 1.0325, the level to beat for the USD to resume its bullish trend.

Support levels: 1.0370 1.0325 1.0280

Resistance levels: 1.0430 1.0475 1.0510