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EUR/USD Forecast: Faces Next Relevant Resistance At 1.0900

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EUR/USD Forecast: Faces Next Relevant Resistance At 1.0900

EUR/USD Current Price: 1.0886

  • Coronavirus keeps spreading in Europe, spooking investors into safety.
  • US data missed the market’s expectations, hurting the greenback.
  • EUR/USD faces next relevant resistance at 1.0900, the 38.2% retracement of its latest daily slump.

The financial world was all about sentiment for a second consecutive day. The American dollar recovered some of its Monday losses throughout the first half of the day, but resumed its decline with the US opening, amid poor local data and government yields collapsing, raising speculation of a possible recession in the world’s largest economy. Meanwhile, more European countries reported coronavirus cases and fears it becomes a pandemic kept high-yielding assets on the losing side.

The EUR/USD pair surged to 1.0887 a fresh one-week high, with the common currency lacking follow-through amid fears of economic slowdown also hitting the Union. The German Federal Statistical Office confirmed 2019 Q4 GDP at 0.0%, confirming economic weakness in the Union.  As for the US, data came in below expected, as the February Richmond Fed Manufacturing Index came in at -2 vs 20 previously and the 13 expected. Also, the CB Consumer Confidence Index resulted at 130.7, below the 132.6 expected, as the January index was downwardly revised from 131.6 to 130.4. Wednesday will bring no macroeconomic data of relevance.

EUR/USD Short-Term Technical Outlook

The  EUR/USD pair is finishing the day near its daily high and above the 23.6% retracement of its latest daily decline, the immediate support at 1.0850, with the next Fibonacci resistance at 1.0900. The 4-hour chart shows that the pair is holding above a bullish 20 SMA, although the 100 SMA keeps heading south above the current level, converging with the 38.2% retracement of the mentioned decline. Technical indicators consolidate near overbought levels, favouring additional gains without confirming them. Beyond the mentioned 1.0900 figure, bears will probably step back and wait for higher levels.

Support levels: 1.0850 1.0810 1.0770  

Resistance levels: 1.0900 1.0930 10960

Image Sourced from Pixabay

 

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Posted-In: Earnings News Eurozone Forex Global Economics Markets General

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