EUR/USD Forecast: Could Accelerate South Once Below 1.1760

EUR/USD Current Price: 1.1777

• EU Q2 Gross Domestic Product confirmed at -11.8%, better than the -12.1% previous.
• The US Congress remains far away in a coronavirus aid package.
• EUR/USD fell for a third consecutive day, could accelerate south once below 1.1760.

The EUR/USD pair fell to 1.1765, its lowest in over a week, ending the day in the red below 1.1800. The dollar strengthened throughout the first half of a day, underpinned by increased tensions between the EU and the UK weighing on high-yielding assets. The greenback eased during US trading hours following comments from House Speaker, Pelosi and Senate Majority Leader Mitch McConnell, regarding an aid package. Republicans will put in the table a $300B bill, which is far less than what Democrats are seeking. Pelosi said that such a small package is an insult to American people.

The EU published its Q2 Gross Domestic Product, which was revised to -11.8% in Q2, better than the previous estimate of -12.1%, but still showing record contraction. Also, and in the three months to June, the Employment Change came in at -2.9%, worse than the previous -2.8%. The US, on the other hand, published minor figures, the NFIB Business Optimism Index for August, which improved to 100.2 from 98.8, beating expectations.and the IBD/TIPP Economic Optimism for September, which printed at 45 from 46 previously. The macroeconomic calendar will not offer relevant data for these two economies on Wednesday.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair retains its bearish stance and is at risk of falling further, although would need to break below 1.1760. The 4-hour chart shows that it has extended its decline below all of its moving averages, while a bearish 20 SMA kept providing intraday resistance. Technical indicators have lost their bearish strength, but remain within negative levels, indicating absent buying interest.

Support levels: 1.1760 1.1710 1.1680

Resistance levels: 1.1840 1.1880 1.1925  

View Live Chart for the EUR/USD

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