EUR/USD Price Forecast: Pressure remains with lower lows in sight

EUR/USD Current price: 1.0392

• The US Dollar gathered momentum as the sentiment soured in Europe.
• Action across financial boards is limited in a holiday-shortened week.
• EUR/USD is under pressure, with lower lows for the day likely.

The EUR/USD pair trades with a soft tone on Monday, with the US Dollar (USD) regaining its strength in a holiday-shortened week. The pair started the day trading at around 1.0430 but currently stands below the 1.0400 mark as the market mood soured throughout the day.

Asian shares turned north, weighing on the USD demand, although the sentiment deteriorated in Europe, with most local indexes turning red and providing near-term support to the American currency. However, activity is well-limited amid winter holidays and celebrations. Most major markets will close on Tuesday, with the holiday extending up to Thursday in Europe.

Data-wise, the macroeconomic calendar has little to offer. Germany published the November Import Price Index, up 0.9% in the month. Later in the day, the United States (US) will release the November Chicago Fed National Activity Index and December CB Consumer Confidence, foreseen at 112.9, up from the previous 111.7.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows the risk skews to the downside. The pair develops far below all its moving averages, with the 20 Simple Moving Average (SMA) heading south far below the 100 and 200 SMA, which also gain downward strength. Technical indicators, in the meantime, have resumed their declines within negative levels, in line with the ongoing selling pressure.

The near-term picture is also bearish. EUR/USD has fallen below a bearish 20 SMA after starting the day above it, finding intraday resistance around it, currently at 1.410. At the same time, the Momentum indicator retreated sharply from near overbought readings and is currently about to cross its 100 line into negative territory. Meanwhile, the Relative Strength Index (RSI) indicator also heads south, but at 41, in line with lower lows for the day.

Support levels: 1.0370 1.0330 1.0290  

Resistance levels: 1.0410 1.0445 1.0490