EUR/USD Current price: 1.1383
- ECB President Lagarde said that trimming financial facilities would do more harm than good.
- US Treasury yields picked up at the start of the week, reflecting the market’s concerns.
- EUR/USD trades at fresh 2021 lows and is poised to fall further.
The EUR/USD pair fell to a fresh 2021 low of 1.14379 and trades nearby ahead of Wall Street’s close, as comments from European Central Bank President Christine Lagarde undermined demand for the shared currency. Mrs Lagarde added nothing new to what the market already knew, as she said that any tightening measure now would cause more harm than good to the economy. Additionally, US data was upbeat, as the country published the NY Empire State Manufacturing Index, which improved to 30.9 in November from 19.8 previously.
Meanwhile, European indexes closed in the green, leading to a strong opening in Wall Street. However, US government bond yields jumped north, pushing equities lower. The yield on the 10-year US Treasury note peaked at 1.62%, while that on the 30-year note reached a two-week high.
On Tuesday, the EU will publish the second estimate of its Q3 Gross Domestic Product, foreseen unchanged at 2.2% QoQ. More relevant, the US will release October Retail Sales, foreseen up 0.7% MoM. An upbeat reading may push the greenback further up, not only against the EUR.
EUR/USD short-term technical outlook
From a technical point of view, the EUR/USD pair is at risk of falling further. The daily chart shows that technical indicators have resumed their declines near oversold readings, reflecting the selling interest’s strength. Additionally, the pair keeps developing below bearish moving averages, with the 20 SMA currently at around 1.1575.
In the near term, and according to the 4-hour chart, the risk is skewed to the downside. Technical indicators have corrected oversold conditions before resuming their declines, with the Momentum rejected from around its 100 level and the RSI indicator heading firmly lower at fresh multi-month lows. Meanwhile, the 20 SMA has extended its slide far below the longer ones and now acting as dynamic resistance near the daily high.
Support levels: 1.1350 1.1310 1.1265
Resistance levels: 1.1425 1.1470 1.1515
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