EUR/USD Forecast: Corrective decline could continue once below 1.1545

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1560

US-China tensions lift concerns about the future of economic growth.
Mixed US employment data fell short of triggering some action across the board.
EUR/USD is correcting overbought conditions but intrinsically bullish.

The EUR/USD pair is trading a few pips below the multi-month high set this week at 1.1601, with major pairs having spent the first half of the day within familiar levels. Investors are in wait-and-see mode, concerned about mounting tensions between the US and China, and the pandemic developments. So far, nothing has been reported on the situation of the trade deal between Washington and Beijing, but this tense situation for sure will mean a deterioration in trade. About the coronavirus crisis, the US reported over 70,000 new cases in the previous 24 hours. Global new cases are 280,000 a record high.

German data failed to impress, although consumer sentiment improved, as the latest GFK Consumer Confidence Survey came in at -0.3 from -9.4 in the previous month. As for the US, the country published Initial Jobless Claims for the week ended July 17, which resulted at 1.41 million, worse than the 1.3M expected. Continuing Jobless Claims for the week ended July 10, improved to 16.197M. The numbers passed unnoticed.

EUR/USD short-term technical outlook

The EUR/USD pair is trading at daily lows around 1.1560, correcting overbought conditions but without signs of a bearish extension coming up next. The 4-hour chart shows that the 20 SMA maintains its firm bullish slope far above the larger ones, which also advance. Technical indicators, in the meantime, barely retreated from overbought levels. The corrective decline could continue on a break below 1.1545, a former high and the immediate support, while bulls will increase their bets on a break above 1.1620.

Support levels: 1.1545 1.1500 1.1460

Resistance levels: 1.1590 1.1620 1.1660

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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