EUR/USD Price Forecast: Pressure remains in holiday-thinned trading

EUR/USD Current price: 1.0392

• The 10-year Treasury bond yield stands at its highest since last May.
• Most financial markets will remain closed for at least until Thursday.
• EUR/USD trades in a tight range, but the risk remains skewed to the downside.

The EUR/USD pair hovers around the 1.0400 mark, confined to a tight intraday day on Christmas Day. Most major financial markets are closed, with activity resuming on Thursday and, in some cases, on Friday.

European markets are closed, while United States (US) ones will open, but are due to an early close. The country may publish some minor data, which is quite unlikely to trigger a market’s reaction.

As investors gear up for holidays, there's no action either among stocks. Wall Street’s futures are unchanged following a positive close on Monday. In the meantime, government bond yields consolidate gains, with the 10-year Treasury note offering 4.60%, its highest since last May.

EUR/USD short-term technical outlook

The technical picture suggests EUR/USD would maintain the negative bias heading into the year-end, as the pair keeps developing below all its moving averages. A mildly bearish 20 Simple Moving Average (SMA) heads lower above the current level yet below bearish 100 and 200 SMAs. Technical indicators, in the meantime, maintain modest downward slopes within negative levels.

The near-term picture also skews the risk to the downside. The EUR/USD pair is currently a handful of pips below a flat 20 SMA, while the 100 and 200 SMAs gain downward traction far above the shorter one. At the same time, technical indicators head marginally lower with uneven strength but still in line with the prevalent selling pressure.

 Support levels: 1.0370 1.0330 1.0290  

Resistance levels: 1.0410 1.0445 1.0490