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EUR/USD Forecast: Unable To Leave The 1.1000 Region, Bulls May Finally Capitulate

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EUR/USD Forecast: Unable To Leave The 1.1000 Region, Bulls May Finally Capitulate

EUR/USD Current Price: 1.1011

  • The US Federal Reserve maintained the status quo as expected, no market reaction.
  • Focus this Thursday will be on the preliminary estimate of US Q4 Gross Domestic Product.
  • EUR/USD unable to leave the 1.1000 region, bulls may finally capitulate.

The EUR/USD pair has remained under selling pressure, falling to a fresh 2020 low of 1.0991 ahead of the event of the day, the Fed’s monetary policy announcement. As expected, the US Central Bank has left its main rate unchanged at 1.5%-1.75%, while the accompanying statement was pretty much a copy of that of December, triggering no market’s reaction. Powell’s speech didn’t provide additional clues that could trigger some market’s action, with the dollar easing just modestly with his speech.

Ahead of the Fed  Germany published the  GFK Consumer Confidence Survey, which improved to 9.9 in February, surpassing the market’s expectations of 9.6. The US has just published the preliminary estimate of December Wholesale Inventories, which came in at -0.1%, and the Goods Trade Balance for the same month with the deficit widening to $68.33B from $62.99, slightly better than expected. Pending Home sales fell by 4.9% in December, missing the market’s expectation of a 0.5% advance.

This Thursday, the EU will release the January Economic Sentiment Indicator, foreseen at 101.8 from 101.5 previously. Germany will publish the preliminary estimates of January inflation, foreseen at 1.7% YoY, while the US will publish the first estimate of Q4 GDP, foreseen at 2.1%. The market will likely wait for this last before compromising with a certain USD position.

 EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading at around 1.1010, retaining its negative technical stance in the short-term. The 4-hour chart shows that it continues to develop below all of its moving averages, with the 20 SMA providing intraday resistance. The Momentum indicator has retreated from near its mid-line, heading south, while the RSI continues to consolidate around 30, all supportive of additional declines once the pair breaks below 1.0980, the immediate support.

Image Sourced from Pixabay

 

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