EUR/USD Price Forecast: Interim top around 1.20?

EUR/USD is attempting a side-lined theme in the mid-1.1800s at the beginning of the week, managing to regain traction following last week’s lows in the 1.1780 region.

The pair has come under downside pressure soon after hitting fresh +2-year peaks above 1.20 the figure on September 1 and risks some consolidation or even a deeper pullback if it does not re-visit that area in the short-term horizon (ideally).

On the macro scenario, the upcoming ECB event on Thursday appears to be crucial for the pair’s direction in the near/medium-term, as the central bank is expected to shed further details on the progress of the economic recovery in the region as well as its outlook for the next months while investors will also closely follow any mention of potential stimulus measures.

Short-term Outlook

EUR/USD faces initial contention in the mid-1.1700s ahead of the more relevant 1.1700 neighbourhood. The latter is also reinforced by a Fibo level (of the 2017-2018 rally). The daily RSI did not confirm the new top beyond 1.20, opening the door for some near-term weakness. On the upside, the immediate hurdle still emerges at the recent peak near 1.2010.