EUR/USD Forecast: Dollar eases amid cautious investors

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1767

EU Sentix Investor Confidence contracted in August to 22.2, worse than expected.
Global stocks´ indexes struggle to advance after rallying on Friday.
EUR/USD advances modestly but retains the bearish tone.

The EUR/USD pair fell to 1.1742 on Monday, a fresh four-month low, bouncing afterwards amid the receding US dollar’s demand. However, the pair trades not far above such a low, hovering around the 1.1760 level ahead of Wall Street’s opening. Markets are in wait-and-see mode, waiting for a relevant catalyst. Stocks trade lower in Europe, weighing on US futures, although losses are limited.

Macroeconomic data coming from the Union helped to limit advances, as EU Sentix Investor Confidence contracted by more than anticipated in August, to 22.2 from 29.8. Germany released its June Trade Balance, which posted a surplus of €13.6 billion, beating the market’s expectations. The US will publish the June JOLTS Job Openings report, foreseen at 9.209 million.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is bearish. The 4-hour chart shows that it is developing well below all of its moving averages, with the 20 SMA heading south below the longer ones. Technical indicators have recovered from extreme oversold readings to stabilize well into negative levels, indicating absent buying interest. The pair could enter in a corrective recovery if it’s able to recover beyond 1.1800. On the other hand, renewed selling pressure below 1.1750 should open the door for a steeper decline toward 1.1703, March monthly low.

Support levels: 1.1805 1.1750 1.1705

Resistance levels: 1.1880 1.1920 1.1960

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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