EUR/USD Price Forecast: Pause around 1.0850 ahead of lower lows

EUR/USD Current price: 1.0852

• Earning reports taking centre stage amid a scarce macroeconomic calendar.
• German Producer Price Index contracted by more than anticipated in September.
• EUR/USD maintain its bearish stance and seems poised to pierce the 1.0800 mark.

The EUR/USD pair hovers around 1.0850, trading uneventfully on Monday as investors gear up for fresh clues. With the macroeconomic scarce this week, the focus will be on earnings. Multiple United States (US) companies will report this week, and investors are eagerly waiting for another batch of upbeat figures. US indexes keep pressuring record highs as, besides the encouraging numbers, investors believe the Federal Reserve (Fed) will keep reducing interest rates at a moderated pace.

Data-wise, Germany published the September Producer Price Index (PPI), which contracted by 0.5% on a monthly basis and by 1.4% from a year earlier. The US calendar had not much to offer but comments from different Fed officials.

EUR/USD short-term technical outlook  

From a technical point of view, the EUR/USD pair is still at risk of falling. The daily chart shows a flat 200 Simple Moving Average (SMA) keeps providing dynamic resistance at around 1.0880. At the same time, the 20 SMA extends its slide above the longer one, maintaining its downward slope in line with persistent selling interest. Technical indicators, in the meantime, remain well below their midlines and near oversold readings, with uneven directional strength.

In the near term, and according to the 4-hour chart, EUR/USD is stuck around a bearish 20 SMA, while the 100 and 200 SMAs keep heading sharply lower, far above the current level. Finally, technical indicators head marginally lower in the neutral-to-bearish territory, supporting another leg lower should the pair break below 1.0805, the immediate support level.

Support levels: 1.0805 1.0770 1.0735

Resistance levels: 1.0880 1.0920 1.0950