EUR/USD Forecast: The Short-Term Perspective Turns To The Downside

• EUR/USD comes under strong pressure amid a stronger dollar.
• The short-term perspective turns to the downside, but 1.1050 holds.

Media outlets have reported that China had invited US negotiators to meetings in Beijing, suggesting there are some remaining issues to sort out. Meanwhile, the South China Morning Post (SCMP) has reported that a high-profile signing ceremony of the Hong-Kong bill may anger China, which is closely watching the events.
Earlier in the day, the minutes of the latest European Central Bank meeting were published. A plea for patience was made to allow the measures taken in September to work through the economy, supporting a wait and see posture at the current juncture. On Friday, Christine Lagarde will be speaking for the first time as the ECB President.

US macroeconomic data was mixed. While the Philly Fed Manufacturing Index came in above expectations (printing 10.4 in November from 5.6 previous and 7 of consensus), last week’s initial jobless claims and existing home sales disappointed.

EUR/USD Short-Term Technical Outlook

EUR/USD briefly rose above the 100-day SMA and touched a high of 1.1096 before turning down and falling back to the 1.1050 area. The technical picture has turned negative in the 4-hour chart and in the daily chart. The 1.1050 support has managed to hold the bearish pressure so far, but a break below would pave the way towards its November’s low of 1.0989.

On the upside, immediate resistance is seen at the 100-day SMA, currently at 1.1088, followed by the 1.1100 area. However, a break above the 1.1175 zone, where the 200-day SMA converges with October’s monthly high, is needed to shift the longer-term bias to the upside.

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