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

Valeria Bednarik FXStreet

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

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.