Market Overview

EUR/USD Forecast: Bearish In The Short-Term, Trades At Fresh Two-Week Low

EUR/USD Forecast: Bearish In The Short-Term, Trades At Fresh Two-Week Low

EUR/USD Current Price: 1.1207

  • Rising cases of coronavirus in the US and outbreaks in other countries sounded the alarms.
  • US Initial Jobless Claims hit 1.5 million in the week ended June 12.
  • EUR/USD is bearish in the short-term trades at fresh two-week lows.

The EUR/USD pair has extended its weekly slump below 1.1200, as the greenback benefited from the poor performance of global equities. Fears grew amid a persistent increase in coronavirus cases in the US and a large outbreak in Beijing. China has returned to lockdown in some cities, but US President Trump said that he won’t stop the economic activity. Outbreaks have also been reported in Germany and Portugal. Without a vaccine available, fears that the world’s economic recovery would be delayed even further put investors in cautious mode.

Data coming from the US was mixed, as, for the week ended June 12, Initial Jobless Claims rose by 1.5M above the 1.3M expected. Continuing Jobless Claims in the week ended June 5 came in at 20.5M vs. the 19.8M expected.  The Philadelphia Fed's Manufacturing Index, on the other hand, jumped to 27.5 in June from .43.1 in May. This Friday, the EU will release its April Current Account, while the US calendar has nothing relevant to offer, although US Fed’s Chair Powell is due to participate in a panel discussion about building a resilient workforce during the coronavirus era.

EUR/USD short-term technical outlook

The EUR/USD pair is poised to extend its decline, as, in the 4-hour chart, it has broken below a bullish 100 SMA for the first time in almost a month. The 20 SMA, in the meantime, converges with the 23.6% retracement of the latest daily advance at 1.1270, reinforcing the resistance level. Technical indicators maintain their strong bearish slopes within negative levels and nearing oversold readings. The next Fibonacci support comes at 1.1170, and a break below it could see the pair extending its decline towards the 1.1080 price zone.

Support levels: 1.1170 1.1120 1.1080

Resistance levels: 1.1225 1.1270 1.1310

View Live Chart for the EUR/USD


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Posted-In: EUR/USD FXStreetNews Forex Markets

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