Market Overview

EUR/USD Forecast: At Risk Of Extending Its Decline

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EUR/USD Forecast: At Risk Of Extending Its Decline

EUR/USD Current Price: 1.0843

  • German inflation reported as expected in January, US one better than expected.
  • German and EU growth taking centre stage this Friday through Q4 GDP releases.
  • EUR/USD at risk of extending its decline, next relevant support at 1.0770.

Risk-off returned to financial markets this Thursday, amid renewed concerns related to the coronavirus outbreak after roughly 15,000 new cases and over 240 deaths were reported as of February 12, bringing the death toll to over 1,350. The EUR/USD fell to a fresh multi-year low of 1.0833, amid renewed dollar’s demand and self euro’s weakens.

Data released the Thursday favoured the slide, as Germany final CPI came in as expected and as previously estimated, while US inflation came in better than expected in the same month. Annual CPI in the country hit 2.5%, while the core reading resulted at 2.3%. This Friday, Germany and the EU will release their preliminary estimates of Q4 GDP. German’s growth is foreseen at 0.1% in the three months to December, while for the Union the forecast is of 0.1%. The US will publish January Retail Sales and the February preliminary estimate of the Michigan Consumer Sentiment Index, foreseen at 99.5 from 99.8 final in January.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading near the mentioned low, unable to post a relevant bounce, leading to oversold conditions in technical readings. The  4-hour chart shows that the 20 SMA keeps heading firmly lower above the current level, providing dynamic resistance and far below the larger ones. Technical indicators maintain their bearish slopes despite being in extreme levels, supporting further declines toward the 1.0810 price zone.   

Support levels: 1.0810 1.0770 1.0725

Resistance levels: 1.0895 1.0930 1.0965

Image Sourced from Pixabay

Posted-In: News Eurozone Commodities Options Forex Retail Sales Global Markets

 

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