Market Overview

EUR/USD Forecast: Offering An Increased Bearish Potential In The Short-Term

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EUR/USD Forecast: Offering An Increased Bearish Potential In The Short-Term

EUR/USD Current Price: 1.1714

  • The first US presidential debate resulted quite disappointing for speculative interest.
  • Increased hopes for a US coronavirus aid package boosted the sentiment by the end of the day.
  • EUR/USD is offering an increased bearish potential in the short-term.

The risk switch was turned off and on throughout the day, and the dollar traded alongside. The EUR/USD pair traded as high as 1.1754, and as low as 1.1684, now ending the day in the red in the 1.1710 price zone. During Asian trading hours, the market focused on the US Presidential Debate, which ended up spurring risk aversion, as it provided little of substance to speculative interest, except that US President Trump refused to say that he would accept the election results.

The pair bounced from its daily low during US trading hours, amid renewed hopes for a US coronavirus aid package and better-than-expected US data. Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi are working to reach a deal before the election. Democrats have proposed a $2.2 trillion plan,  while the White House counteroffer involves $1.5 trillion that could be expanded to $2 trillion. Ahead of Wall Street’s close, however, Mnuchin said that there’s no deal yet, pushing equities off daily highs. The US  September ADP survey showed that the private sector added 749K new jobs, beating the market’s expectations of 650K. The country also published the final reading of Q2 GDP, which resulted in -31.4% slightly better than the previous estimate of -31.7%.

This Thursday, Markit will publish the final readings of September Manufacturing PMIs for the EU and the US, while the latest will release the official ISM Manufacturing PMI for the same month, foreseen at 56.3 against the previous 56. The country will also release Initial Jobless Claims for the week ended September 25, foreseen at 850K.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair trades just above the 38.2% retracement of its latest daily decline, after meeting sellers around the 50% retracement for a second consecutive day. The 4-hour chart indicates that buying interest eased, but is still far from suggesting an upcoming decline. The 20 SMA advances below the current level, now converging with the next Fibonacci support, while technical indicators retreated from their recent highs, but remain within positive levels. The risk will skew to the downside on a break below 1.1670, the immediate support level.

Support levels: 1.1670 1.1625 1.1590

Resistance levels: 1.1750 1.1790 1.1830

View Live Chart for the EUR/USD

Image sourced from Pixabay

 

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Posted-In: EUR/USD FXStreetNews Eurozone Global Markets

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