EUR/USD Price Forecast: Downward pressure increases, 1.1600 at risk

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1606

Easing trade tensions between the US and China backed the US Dollar.
The United States government remains shut down, funding crisis deepens.
EUR/USD is bearish in the near term, immediate support at 1.1590.

The EUR/USD pair nears 1.1600 early in the American session on Tuesday, as the US Dollar (USD) trades with a firmer tone across the FX board. Easing trade tensions between China and the United States (US) provides near-term support to the Greenback in the absence of other news.

US President Donald Trump surprised markets with his latest comments on the Asian giant, dialing back his aggressive tone, as he said China has treated the US with “great respect,” adding he thinks they will clinch a deal. He also noted that he thinks China will come to the table because of tariffs. Trump will meet his Chinese counterpart Xi Jinping on the sidelines of an economic conference in South Korea next week.

Meanwhile, the US government shutdown continues, with no resolution at sight. The stalemate between Democrats and Republicans continues with thousands of federal workers furloughed and many more fired. The funding crisis deepens, with the Senate failing to pass a bill once again on Monday.

On the data front, the macroeconomic calendar had nothing relevant to offer.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair shows it is down for a third consecutive day, and poised to extend its slide. Sellers maintain the upside limited around a flat 100 Simple Moving Average (SMA) at around 1.1650, while a bearish 20 SMA stands a handful of pips above the longer one. At the same time, technical indicators extend their bearish slopes within negative levels after failing to overcome their midlines.

In the near term, and according to the 4-hour chart, EUR/USD is firmly bearish. Technical indicators head south near oversold readings, as the pair extends its slide below all its moving averages. Even further, the 20 SMA lost its upward strength and currently converges with a mildly bearish 100 SMA at around 1.1650, reinforcing the resistance area.

Support levels: 1.1590 1.1540 1.1510

Resistance levels: 1.1650 1.1690 1.1740

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.

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