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EUR/USD Forecast: Turned Bearish In The Short-Term And Could Retest The 1.1750 Price Zone

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EUR/USD Forecast: Turned Bearish In The Short-Term And Could Retest The 1.1750 Price Zone

EUR/USD Current Price: 1.1800

  • US Retail Sales missed expectations, spurring speculation about the country’s economic health.
  • The Federal Reserve left the monetary policy unchanged, positively review growth figures.
  • EUR/USD turned bearish in the short-term and could retest the 1.1750 price zone.

The dollar traded with a sour tone throughout the first half of the day, but the EUR/USD pair held below 1.1900. The pair retreated from an intraday high of 1.1882 following the release of dismal US data and in anticipation of the US Federal Reserve announcement. Retail sales gained 0.6% in August, while the core reading, Retail Sales Control Group, contracted  -0.1%, missing expectations of 0.5%.  The tepid numbers anticipate more easing for longer, with equities reaching weekly highs.

Then came the Fed. As expected, the central bank left its monetary policy unchanged, including in the statement, the latest framework shift to an average inflation target. Fresh forecasts showed that the FOMC expects the GDP to contract by 3.7% at a softer pace than the previous forecast of 6.5% in 2020 and sees unemployment at 7.6% at year's end, compared to 9.3% in June projection. Fed fund rates are seen unchanged for this year and the next ones, while inflation was downwardly revised for this year to 1.0% from 1.5%. The central bank had a limited impact on currencies, as the dollar seesawed within familiar levels through the event.

This Thursday, the EU will publish the final reading of August inflation, while the US will release housing data for August, and Initial Jobless Claims for the week ended September 11.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair fell below 1.1800, with the shared currency weakening at a faster pace against the greenback that other major rivals. The pair turned bearish in the short-term, as the 4-hour chart shows that it’s now developing well below all of its moving averages, which anyway remain confined to a tight range. Technical indicators, in the meantime,  are firmly bearish within negative levels, supporting a test of the low set this month at 1.1752.

Support levels:  1.1750 1.1710 1.1665

Resistance levels: 1.1880 1.1915 1.1960  

View Live Chart for the EUR/USD

Image sourced from Pixabay

 

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

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