EUR/USD Price Forecast: Consolidative phase around 1.0400

EUR/USD Current price: 1.0392

• Unimpressive macroeconomic data left EUR/USD trading on sentiment.
• Action across financial boards is limited in a holiday-shortened week.
• EUR/USD settled around 1.0400 and is technically neutral in the near term.

The EUR/USD pair finishes the American session as it started it, trading around the 1.0400 threshold. Financial markets are in a winter holiday mood, with Christmas around the corner interrupting activity. The US Dollar (USD) seesawed alongside sentiment, trading within familiar levels throughout the day.

Mixed macroeconomic data was unimpressive. On the one hand, Germany published the November Import Price Index, up 0.9% in the month.  On the other, European Central Bank (ECB) President Christine Lagarde commented on monetary policy, repeating that the ECB will further cut interest rates if incoming data confirm that disinflation is on track, adding the Eurozone growth will likely take a hit from fresh United States (US) protectionist measures.

As for the US, the country released November Durable Goods Orders, which fell 1.1% in November, worse than the 0.4% decline expected. Additionally, CB Consumer Confidence edged sharply lower in December, falling to 104.7 from 112.8 in November and missing the expected 112.9. Finally, New Home Sales were up 5.9% in November, improving from -14.8% in the previous month.

The macroeconomic calendar has nothing relevant to offer in the upcoming days, with European markets returning on Friday.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for EUR/USD suggests bears retain control. The pair develops below all its moving averages, with a mildly bearish 20 Simple Moving Average (SMA) well above the current level yet far below the 100 and 200 SMA, which also gain downward strength. Technical indicators, in the meantime, head south within negative levels, in line with the ongoing selling pressure.

The near-term picture is also bearish. In the 4-hour chart, the EUR/USD pair hovers around a bearish 20 SMA. The longer moving averages maintain modest downward slopes above the current level. Finally, technical indicators have pierced their midlines but turned flat around them, turning neutral.

Support levels: 1.0370 1.0330 1.0290  

Resistance levels: 1.0410 1.0445 1.0490