EUR/USD Forecast: Growth concerns weigh on the shared currency

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1705

The shared currency remained under pressure amid concerns about economic growth.
US Federal Reserve’s Powell said the US economy remains resilient throughout the crisis.
EUR/USD is trading at fresh two-month lows and still biased lower.

The EUR/USD pair plunged below the 1.1700 level this Tuesday, trading as low as 1.1691, a level last seen in July. Concerns about a second coronavirus wave hitting Europe maintained the shared currency under pressure, despite stocks pared their bleeding and better-than-expected EU data. The preliminary estimate of September Consumer Confidence printed at -13.9 from -14.7 in August.

In the US, Fed’s Chair Powell testified before a House special commission, noting that the US economy has remained resilient and that the banking system has held up well during the ongoing crisis. However, he also said that further economic progress would depend if they can control the virus and most likely will need fiscal support.

This Wednesday, Markit will release the preliminary estimates of its September PMIs for the EU and the US. Manufacturing output is generally seen better than in August, while services activity is seen improving in the EU but deteriorating in the US. Powell will testify

EUR/USD short-term technical outlook

The EUR/USD pair is trading around the 1.1700 level, maintaining the bearish bias. The 4-hour chart shows that it remains below bearish moving averages, with the 20 SMA accelerating south, currently around 1.1800. Technical indicators, in the meantime, have bounced modestly from oversold levels, but lack directional strength. The risk remains skewed to the downside, with renewed selling interest below 1.1695 anticipating another leg south for this Wednesday.

Support levels: 1.1695 1.1660 1.1620

Resistance levels: 1.1725 1.1760 1.1800

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.