EUR/USD Price Forecast: Sellers hold the grip, paused

EUR/USD Current price: 1.0497

• Mixed European data maintained the Euro on the downside on Tuesday.
• The United States Federal Reserve will take centre stage on Wednesday.
• EUR/USD is technically neutral as investors await first-tier news.

The EUR/USD pair is under mild selling pressure, trading a handful of pips below the 1.0500 mark amid a resurgent US Dollar (USD). Financial markets are looking into mid-tier figures ahead of more relevant events scheduled for later in the week. United States (US) Treasury yields are up, backing the Greenback’s near-term strength. Stock markets, however, trade mixed, suggesting caution rather than fear.

Data-wise, the Eurozone published the October Trade Balance, which posted a non seasonally adjusted surplus of €6.8 billion, down from the €11.6 billion posted in September. Additionally, the German ZEW Survey showed Economic Sentiment improved in December to 15.7 from 7.4 in the previous month. The US will publish November Retail Sales, foreseen up 0.5% after posting a 0.4% increase in October.

Other than that, investors await central banks’ announcements. The US Federal Reserve (Fed) is undergoing a two-day meeting to decide on monetary policy. The Fed is largely anticipated to trim the benchmark interest rate by 25 basis points (bps), with the focus then shifting towards the Summary of Economic Projections (SEP) or dot plot, as the document represents policymakers' perspectives for growth, inflation, employment and interest rates.

EUR/USD short-term technical outlook

The EUR/USD pair peaked at 1.0533 but quickly retreated from the level and trades in the red. The daily chart, shows a bearish 20 Simple Moving Average (SMA) keeps providing dynamic resistance at around 1.0520, while the 100 and 200 SMAs gain downward traction far above the shorter one. Technical indicators, in the meantime, aim marginally lower, albeit with limited strength, falling short of anticipating a steeper decline.

In the near term, EUR/USD remains lifeless. The pair trades within familiar levels for over a week now, with a flat 100 SMA containing advances. The 20 SMA, in the meantime, also turned flat, albeit below the longer one, suggesting sellers hold the grip but refrain from adding pressure. Finally, technical indicators turned marginally higher, yet the Relative Strength Index (RSI) indicator remains within negative levels, not enough to support another leg north.

Support levels: 1.0460 1.0410 1.0375

Resistance levels: 1.0520 1.0570 1.0625