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EUR/USD Forecast: At Risk Of Accelerating Its Decline Once Below The 1.2100 Level

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EUR/USD Forecast: At Risk Of Accelerating Its Decline Once Below The 1.2100 Level

EUR/USD Current Price: 1.2137

  • US President Biden’s stimulus plan at doubt, hurting the market’s mood.
  • German IFO survey missed expectations in January amid extended lockdowns.
  • EUR/USD is at risk of accelerating its decline once below the 1.2100 level.

The EUR/USD pair fell to 1.2115, as a change in the market’s sentiment fueled demand for the greenback. Investors´ mood suffered a setback after the release of poor German data, later exacerbated by discouraging headlines related to US stimulus. The German IFO survey showed that the Business Climate fell to 90.1 in January from a revised 92.2. The assessment of the current situation contracted to 89.2, while expectations fell to 91.1, all missing the market’s forecasts. Also, weekend news indicating that US President Joe Biden’s stimulus plan finds opposition within its own party further hurt the market’s mood.

The US published the December Chicago Fed National Activity Index, which printed at 0.52 from 0.31 previously, and the January Dallas Fed Manufacturing Business Index came in at 7 from 10.5 in December. This Tuesday, the macroeconomic calendar has little to offer, although the US will publish the CB Consumer Confidence index, foreseen at 88.9 from 88.6 previously.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair has bounced from the mentioned low alongside equities, which also moved away from their daily bottoms. Nevertheless, the pair has pulled back after failing to extend gains beyond the 23.6% retracement of its November/January tally. The 38.2% retracement of the same advance comes at 1.2060, a critical support level. In the near-term, the risk is skewed to the downside, as the pair develops below a flat 20 SMA, while the 100 SMA accelerates north above it. Technical indicators head marginally lower within neutral levels.

Support levels: 1.2100 1.2060 1.2025

Resistance levels: 1.2180 1.2225 1.2260

View Live Chart for the EUR/USD

 

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

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