EUR/USD Forecast: Trading At Fresh Two-Month Lows And Still Biased Lower

EUR/USD Current Price: 1.1705

• The shared currency remained under pressure amid concerns about economic growth.
• US Federal Reserve’s Powell said the US economy remains resilient throughout the crisis.
• EUR/USD is trading at fresh two-month lows and still biased lower.

The EUR/USD pair plunged below the 1.1700 level this Tuesday, trading as low as 1.1691, a level last seen in July. Concerns about a second coronavirus wave hitting Europe maintained the shared currency under pressure, despite stocks pared their bleeding and better-than-expected EU data. The preliminary estimate of September Consumer Confidence printed at -13.9 from -14.7 in August.

In the US, Fed’s Chair Powell testified before a House special commission, noting that the US economy has remained resilient and that the banking system has held up well during the ongoing crisis. However, he also said that further economic progress would depend if they can control the virus and most likely will need fiscal support.

This Wednesday, Markit will release the preliminary estimates of its September PMIs for the EU and the US. Manufacturing output is generally seen better than in August, while services activity is seen improving in the EU but deteriorating in the US. Powell will testify

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading around the 1.1700 level, maintaining the bearish bias. The 4-hour chart shows that it remains below bearish moving averages, with the 20 SMA accelerating south, currently around 1.1800. Technical indicators, in the meantime, have bounced modestly from oversold levels, but lack directional strength. The risk remains skewed to the downside, with renewed selling interest below 1.1695 anticipating another leg south for this Wednesday.

Support levels: 1.1695 1.1660 1.1620

Resistance levels: 1.1725 1.1760 1.1800  

View Live Chart for the EUR/USD

Image sourced from Pixabay