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EUR/USD Forecast: Still Poised To Fall But Needs To Break Below 1.2060

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EUR/USD Forecast: Still Poised To Fall But Needs To Break Below 1.2060

EUR/USD Current Price: 1.2136

  • US equities trimmed Wednesday’s losses, driving the dollar lower.
  • Encouraging US data failed to impress, markets driven by a scandal.
  • EUR/USD is still poised to fall but needs to break below 1.2060.

The EUR/USD pair spent most of the day consolidating around 1.2100 but found the strength to bounce at the beginning of the American session. The advance had nothing to do with data or sentiment, but instead with a bunch of market legos gathered on Reddit. After pushing Gamestop shares to record highs, earlier today turned their eyes on silver. The bright metal jumped over 3% with Wall Street’s opening and kept advancing afterwards, providing support to battered equities and other commodities. This is an undergoing story, and will probably continue affecting financial markets in the next few days.

In the data front, Germany published inflation figures. The preliminary estimate of the annual January CPI came in better than anticipated at 1.%. As for the US, the country released the preliminary estimate of its Q4 GDP, which came in at 4% from 33.4% in Q3. The country also published Initial Jobless Claims for the week ended January 22, which printed at 847K slightly better than anticipated. The Goods Trade Balance posted a deficit of $82.47 billion in December, according to preliminary estimates.  

The macroeconomic calendar will include this Friday the German preliminary estimate of Q4 GDP, while the US will publish the December core PCE Price Index, the Fed’s favorite inflation measure.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair retreated from an intraday high at 1.2142 and trades in the 1.2130 region as the US session comes to an end. The short-term picture is bearish, as the 4-hour chart shows that the pair is incapable of advancing beyond a bearish 20 SMA. The 100 SMA keeps heading lower above it, while technical indicators turned lower after failing to overcome their midlines. The pair is still above the 1.2060 Fibonacci support level, a line in the sand for bulls that will likely capitulate on a break below it.

Support levels: 1.2095 1.2060 1.2025  

Resistance levels: 1.2145 1.2180 1.2225  

View Live Chart for the EUR/USD

 

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

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