Market Overview

EUR/USD Forecast: Barely Holding Above The 1.1000 Critical Figure

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EUR/USD Forecast: Barely Holding Above The 1.1000 Critical Figure

EUR/USD Current Price: 1.1014

  • Fears related to the coronavirus outbreak kept high-yielding assets under pressure.
  • US Durable Goods Orders seen up by 0.5% in December.
  • EUR/USD barely holding above the 1.1000 critical figure.

The FX board was all about risk aversion on Monday, amid a weekend report indicating that the Chinese Health Commission reported that the coronavirus transmission ability is getting stronger and that infections could continue to rise. The American dollar rose against most major rivals, with the exception of those considered safe-havens. The EUR/USD pair traded as low as 1.1009, now heading into the Asian session around 1.1015, down for a third consecutive trading day.

Adding pressure on the shared currency, the January IFO Survey showed that the German Business Climate deteriorated to 95.9 from 96.3 in January, against an expected bounce. The sub-components were down, also below the market’s forecast.  US figures were mixed, as December New Home Sales were down by 0.4% monthly basis, well below the 1.5% advance expected. The Dallas Fed Manufacturing Business Index for January, however, came in better than anticipated at -0.2.

This Tuesday, the US will publish December Durable Goods Orders, seen up by 0.5%. The core reading, Non-defense Capital Goods Orders ex Aircraft is seen flat after advancing 0.1% in the previous month.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is technically bearish, as it keeps posting lower lows and lower highs daily basis. In the shorter term, and according to the 4-hour chart, the risk is also skewed to the downside given that the 20 SMA has extended its downward slope above the current level and below the larger ones, currently at around 1.1050. Technical indicators hold near oversold levels, the Momentum heading marginally lower and the RSI flat, with no signs of changing course. The immediate support is now 1.0980, the low from November 29. A break below this last should open doors for a continued decline toward 1.0878.

Image Sourced from Pixabay

Posted-In: Earnings News Eurozone Emerging Market ETFs Forex Global Markets ETFs

 

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