EUR/USD Forecast: Continued bearish pressure persists amid Dollar strength
- Eurozone GDP and employment data due on Wednesday.
- US Retail Sales surpass expectations; Fed to release FOMC minutes on Wednesday.
- The EUR/USD remains below key SMAs, indicating a bearish bias.
The EUR/USD peaked on Tuesday at 1.0951 but failed to hold and pulled back all the way to 1.0900, erasing its daily gains and indicating that sellers remain in control. The US Dollar remains strong after another positive economic report.
Data from the Eurozone showed mixed results. The German ZEW Survey's Expectation Index stood at -12.3 in July, better than the expected -14.9, but the Current Situation Index tumbled to -71.3, worse than the market consensus of -63.0. On Wednesday, the Eurozone will release Q2 growth data and employment figures, as well as industrial production for June.
In the US, retail sales surpassed expectations, showing an increase of 0.7% in July, above the expected 0.4%. However, the NY Empire State Manufacturing Index for August fell to -19, below the market consensus of -1.
After the release of US economic figures, the Dollar initially rose but then dropped. The EUR/USD peaked at 1.0953. However, the Greenback gradually regained strength, pushing the pair towards 1.0900. Risk aversion and a rebound in US yields offer support to the Dollar, which remains firm. On Wednesday, the US will report building permits and industrial production figures, and the Federal Reserve will release its meeting minutes.
EUR/USD short-term technical outlook
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The failed recovery of the EUR/USD reflects that sellers remain in control of the pair. The price reached the 55-day and 100-day Simple Moving Averages (SMAs), as well as the 1.0950 resistance area, and turned downwards. Risks continue to be tilted to the downside on the daily chart. The next strong support awaits at 1.0830, and below that emerges the important 200-day SMA at 1.0780.
On the 4-hour chart, the price is moving with a clear bearish bias, and after a rebound, technical indicators are again turning south. The Relative Strength Index (RSI) is approaching 30. A consolidation below 1.0895 would increase bearish pressure, favoring a test of the weekly low at 1.0874. On the upside, the Euro needs to holds above 1.0935 to improve the outlook.
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
