EUR/USD Forecast: Under Pressure But Not Enough Bearish Signs To Support A Steeper Decline

EUR/USD Current Price: 1.1817

• Consumer confidence contracted further in Germany and the EU according to different estimates.
• US Initial Jobless Claims fell to 787K in the week ended October 16, the lowest reading since March.
• EUR/USD is under pressure but not enough bearish signs to support a steeper decline.

The greenback got to recover some ground this Thursday, appreciating against most of its major rivals. The EUR/USD pair fell to 1.1810 ahead of Wall Street’s opening, to spend most of the American session consolidating around 1.1820. Investors were an expectant audience ahead of definitions related to the US stimulus package and the upcoming US presidential debate, the last one, between Donald Trump and Joe Biden. The market mood improved a bit following the stimulus saga, as House Speaker Nancy Pelosi said they are closing the gap with the White House, yet also expressed doubts the Congress will pass a bill before elections.

In the data front, Germany published the GFK Consumer Confidence Survey, which came in at -3.1 in November, worsening from a previous -1.7 and missing expectations of -2.8. The US, on the other hand, released Initial Jobless Claims for the week ended October 16, which came in at 787K, beating the expected 860K. It also unveiled September Existing Home Sales, which were up 9.4% largely beating expectations. Finally, the EU published the preliminary estimate of October Consumer Confidence, which contracted to -15.5.

Friday will bring the preliminary October Markit PMIs for the EU and the US. Economic activity is expected to have shrunk in the Union and progressed in the US, although such figures can hardly lean the scale in dollar’s favor.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is under pressure, but bears don’t hold the grip yet. The 4-hour chart shows that the price is hovering around a firmly bullish 20 SMA, unable to clear the dynamic support.  Technical indicators maintain their bearish slopes but within positive levels. The chances are skewed to the downside, mainly if the pair accelerates south below the mentioned daily low, eyeing an approach to the 1.1700 threshold.

Support levels: 1.1810 1.1770 1.1725

Resistance levels: 1.1870 1.1915 1.1950

View Live Chart for the EUR/USD

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