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EUR/USD Forecast: Losing Ground But Not Yet Bearish, 1.0990 Critical Support

EUR/USD Forecast: Losing Ground But Not Yet Bearish, 1.0990 Critical Support

EUR/USD Current Price: 1.1044

  • Uncertainty remains high amid the coronavirus pandemic, investors cautious.
  • Manufacturing-related data in the US plummeted to record lows.
  • EUR/USD losing ground but not yet bearish, 1.0990 critical support.

The EUR/USD pair edged lower on Monday, as the greenback managed to recover some ground. The week started with investors in risk-off mode, as the coronavirus pandemic gives no sign of easing, but on the contrary, it keeps taking its toll, particularly in the US and Europe. Asian shared closed dip in the red, dragging European indexes lower. These last, however, recovered ahead of the close, helped by the good performance of Wall Street. The pair fell to 1.1009 during US trading hours, bouncing just modestly from the level to finish the day in the 1.1040 price zone.

Macroeconomic data passed unnoticed, as the main market’s concern is when and how the world would come out of this crisis. Still, EU March Consumer Confidence came in as expected at -11.6 from -6.6 previously, while Germany released the preliminary estimate of March inflation, which resulted at 1.3% YoY, harmonized with that of the EU. In the US February Pending Home Sales surprised to the upside, up by 9.4% YoY, while the March Dallas Fed Manufacturing Business Index collapsed to -70 from 1.2 previously.  The EU will release its preliminary estimate of March inflation this Tuesday, foreseen at 0.8% YoY, while the US macroeconomic calendar will include the March Chicago PMI, and CB Consumer Confidence.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair has retreated further from the 61.8% retracement of its March slide, and also pierced the 50% retracement of it, now the immediate resistance at 1.1065. The 4-hour chart shows that the pair remains capped in the short-term by a mild-bearish 100 SMA although the 20 SMA maintains its bullish slope, now crossing above the 200 SMA. Technical indicators have retreated from overbought readings, the Momentum still heading south and approaching its 100 level, and the RSI now flat around 54, suggesting that market players are not yet looking to re-buy the dollar massively. Nevertheless, the risk is skewed to the downside, with a steeper slide expected on a break below 1.0990.

Support levels: 1.0990 1.0950 1.0920

Resistance levels: 1.1060 1.1100 1.1145

Image sourced by Pixabay


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Posted-In: EUR/USD FXStreetNews Global Economics Markets General

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