EUR/USD Forecast: Bears not giving up despite the better mood

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1788

Risk appetite led the way at the beginning of the week, Wall Street flirted with record highs.
The US FDA approved the use of convalescent plasma to treat severe coronavirus cases.
EUR/USD failed to regain the upside, struggles to retain the 1.1800 level.

The EUR/USD pair peaked at 1.1849 on Monday, underpinned by a ruling good mood. The positive sentiment prevailed throughout the day, with US indexes soaring to flirt with record highs and US Treasury yields ticking higher. Demand for the greenback resumed in the American session, with the EUR/USD pair returning to sub-1.1800 level, where it stands ahead of Tuesday opening.

The optimistic stance was triggered by weekend news indicating that the US FDA approved the use of convalescent plasma to treat severe coronavirus cases, an experimental therapy that other countries are already using. The macroeconomic calendar was scarce, as the only figure out was the US Chicago Fed National Activity Index for July, which came in at 1.18, worse than the expected 2.73 and below the previous 5.33.

This Tuesday, Germany will publish the second estimate of its Q2 GDP, foreseen unchanged at -10.1%, and the August Business Climate, expected at 92 from 90.5 in the previous month. The US will publish July New Home Sales and the CB Consumer Confidence, seen bouncing from 92.6 to 93.2.

EUR/USD short-term technical outlook

The latest advance of EUR/USD fell short of reverting the bearish tone of the pair, according to intraday technical readings. The 4-hour chart shows that the pair met sellers around a bearish 20 SMA, also settling below a flat 100 SMA. Technical indicators, in the meantime, recovered from near oversold readings but failed to regain positive ground, now stable within negative levels. The risk is skewed to the downside, with further declines expected on a break below the 1.1760/70 support area.

Support levels: 1.1760 1.1710 1.1665

Resistance levels: 1.1825 1.1860 1.1915

View Live Chart for the EUR/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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