EUR/USD Forecast: Bearish Breakout Imminent

EUR/USD Current Price: 1.1003
US Fed’s Chief Powell testified before the Congress but failed to impress the market.

• The EU and Germany will release preliminary Q3 GDP this Thursday.
• EUR/USD pressuring a critical Fibonacci support at 1.0990.

Germany released this Wednesday the final version of October inflation, which came in as expected, up by 0.1% MoM and by 0.9% YoY in its harmonised version with the EU. The US also released October CPI which came in slightly better than anticipated,  up by 0.4% MoM and by 1.8% YoY. Yearly core inflation, however, came in at 2.3%, below the 2.4% expected.
This Thursday, Germany will release Q3 Gross Domestic Product, seen at -0.1%, matching the previous estimate. For the EU, Q3 GDP is seen up by a modest 0.2% in the quarter. The US will publish minor data, but multiple Fed’s officers are scheduled to speak, included vice-chair Clarida, while Powell will repeat its testimony before a different commission.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is battling with 1.1000, just above the 61.8% retracement of its October rally, the immediate support at 1.0990. In the 4-hour chart, the pair is biased lower, as it continues easing below all of its moving averages, and with the 20 SMA heading south below the larger ones. The Momentum indicator slides within negative levels after another failed attempt to regain the upside, while the RSI hovers around 30. Large stops are suspected below the mentioned Fibonacci support, and once triggered, the pair could extend its decline toward 1.0920.

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