EUR/USD Forecast: Under Pressure But Could Turn Bearish Below 1.1170

• US new coronavirus cases at 34,700 this Tuesday, the third-highest daily tally since the outbreak began.
• Q1 GDP, Durable Goods Orders, and weekly employment data for the US taking center stage.
• EUR/USD under pressure but could turn bearish only below 1.1170.

The EUR/USD pair edged lower this Wednesday, undermined by renewed risk-aversion. The dismal sentiment was fueled by the continued increase of coronavirus cases in the US, as the country reported 34,700 new cases on Tuesday, the third-highest daily tally since the outbreak began. Adding to the negative sentiment, headlines indicated that the US is planning to impose tariffs in up to $3.1 B on UK’s and EU’s goods. Worldwide indexes closed in the red, with US ones falling to one-week lows.

Germany published the June IFO survey, which showed that the Business Climate in the country improved to 86.2, better than the 85 expected, with Expectations soaring from 80.1 to 91.4, but the assessment of the current situation rising less than anticipated and printing at 81.3. The US published the MBA Mortgage Applications for the week ended June 19, which plunged by 8.7%, and the April Housing Price Index, which resulted at 0.2% MoM.

This Thursday, Germany will publish the GFK Consumer Confidence Survey, foreseen at -12 for July from -18.9 in June. The ECB will publish the minutes of its latest meeting. The US has a more interesting session, as it will publish the final version of Q1 GDP, weekly unemployment figures, and May Durable Goods Orders seen rising by 10.6% after printing -17.7% in the previous month.

EUR/USD short-term technical outlook

The EUR/USD pair is trading near a daily low of 1.1255, just below the 23.6% retracement of its latest daily advance. In the 4-hour chart, the pair is battling with its 20  SMA, which has lost its bullish strength. Technical indicators in the mentioned time-frame, head lower, the Momentum still holding above its mid-line but the RSI already below it, in line with a bearish extension towards 1.1170, the next Fibonacci support.

Support levels: 1.1225 1.1170 1.1120

Resistance levels: 1.1310 1.1350 1.1390  

View Live Chart for the EUR/USD