EUR/USD Forecast: Corrected Extreme Oversold Conditions, Is Still At Risk Of Falling

EUR/USD Current Price: 1.1896

• The American dollar eased alongside US Treasury yields, retains most of its March gains.
• The EU Q4 Gross Domestic Product was downwardly revised to -0.7%.
• EUR/USD has corrected extreme oversold conditions, is still at risk of falling.

The EUR/USD pair was able to recover some of the recently lost ground but remains under pressure around the 1.1900 figure. The greenback retreated alongside Treasury yields,  which reached one-year highs after US Federal Reserve chief’s Jerome Powell said that the central bank is in no rush to raise rates, regardless of yields’ latest behavior. The dollar eased against most major rivals but preserves most of its March gains, with the decline seen corrective as the greenback was extremely overbought.

The macroeconomic calendar remained light. Germany published the January Trade Balance, which posted a surplus of €22.2 billion, beating expectations. The EU published the final version of Q4 GDP, which was downwardly revised to -0.7% from -0.6% previously estimated. The US published February NFIB Business Optimism, which improved from 95 to 95.8. This Wednesday, the US will release February inflation figures. The February Consumer Price Index is foreseen at 1.7% YoY, while the core reading is expected unchanged at 1.4%.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading just below the 1.1900 figure, around the 61.8% retracement of its November/January rally. The pair retains its bearish stance in the near-term, as the 4-hour chart shows that an early spike met sellers around a bearish 20 SMA. Technical indicators in the mentioned chart have corrected extreme oversold readings but remain within negative levels with uneven strength. The pair could resume its decline towards fresh 2021 lows on a break below 1.1840, the immediate support level.

Support levels: 1.1840 1.1790 1.1750

Resistance levels: 1.1920 1.1970 1.2015

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