EUR/USD Price Forecast: Sellers seek for lower lows in a risk-averse environment

EUR/USD Current price: 1.1564

• Fresh United States-China trade tensions undermine the market mood.
• German data indicated an uptick in price pressures at wholesale levels.
• EUR/USD gains downward traction, further slides expected once below 1.1540.

The EUR/USD pair is under selling pressure on Monday, trading around 1.1570 early in the American session. Financial markets started the week in risk-aversion mode, following late Friday headlines coming from the United States (US). President Donald Trump surprised investors by announcing fresh tensions with China and threatening a 100% tariff on Chinese imports. Demand for safety pushes the US Dollar higher (USD), particularly against European rivals.

Other than that, market players have little to care about. Beyond the US government shutdown, the country celebrates Columbus Day. Bond markets will remain closed, but Wall Street will operate normally.

Data-wise, Germany released some minor figures. The September Wholesale Price Index was up 0.2% MoM, and 1.2% YoY, higher than the -0.6% and 0.7% respectively, posted in the previous month. Also, the August Current Account posted a non-seasonally adjusted surplus of €8.3 billion, down from the €15.6 billion in July.

In the American afternoon, Federal Reserve (Fed) Bank of Philadelphia Governor Anna Paulson is due to participate in a moderated discussion titled "A View from the Federal Reserve Bank of Philadelphia" at the National Association for Business Economics Annual Meeting, in Philadelphia.

EUR/USD short-term technical outlook

The EUR/USD pair trades in the red but remains within Friday’s range. From a technical point of view, the daily chart shows a mildly bullish 100 Simple Moving Average (SMA) provides resistance in the 1.1630 area, while the 20 SMA gains downward strength above the longer one. Technical indicators, in the meantime, extend their slides within negative level, hinting at additional slides. Last week’s low at 1.1542 provides immediate support.

The near-term picture for EUR/USD is bearish. The pair fell below all its moving averages, and sellers are maintaining the pressure around a bearish 20 SMA, currently at 1.1600. At the same time, a bearish 100 SMA is crossing below a directionless 200 SMA, both developing just above the 1.1700 mark. Finally, technical indicators head firmly lower within negative levels, approaching oversold readings and supporting a downward extension in the upcoming sessions.

Support levels: 1.1540 1.1500 1.1460

Resistance levels: 1.1600 1.1630 1.1670