EUR/USD Forecast: Next bearish target aligns at 1.0940

EUR/USD has declined below 1.1000 early Tuesday after having closed the first day of the week in negative territory. The near-term technical outlook shows that the pair is likely to continue to extend its slide.

European Central Bank (ECB) President Christine Lagarde acknowledged on Monday that their monetary policy will remain out of sync with the Fed in the foreseeable future. "Our two economies are in a different place in the economic cycle, even before the war in Ukraine," she told a financial conference, per Reuters. "For geographical reasons, Europe is way more exposed to the war than the US." Lagarde is scheduled to speak again at 1315 GMT on Tuesday. 

On the other hand, hawkish comments from Fed officials provided a boost to yields and allowed the greenback to continue to gather strength against its peers. The US Dollar Index is already up 0.7% this week and the benchmark 10-year US T-bond yield is sitting at its strongest level since May 2019 above 2.3%.

Meanwhile, the cautious market mood amid a lack of progress in Russia-Ukraine talks is putting additional weight on the shared currency's shoulders.

Following Monday's meeting, the European Union's foreign ministers have reportedly disagreed on whether or not to embargo Russian oil. Later in the week, US President Joe Biden will be in Brussels to discuss additional sanctions on Russia with transatlantic alliance NATO's 30 members, the EU and the G7.

The economic docket will not feature any high-impact data releases on Tuesday. The fundamental outlook favours the dollar against the euro in the near term due to the ECB-Fed policy divergence and the European economy's high exposure to the ongoing Russia-Ukraine conflict.

EUR/USD Technical Analysis

EUR/USD is trading below the 100-period SMA on the four-hour chart and the Relative Strength Index (RSI) indicator continues to edge lower while holding above 30, suggesting that the pair has more room on the downside before turning oversold.

1.0940 (Fibonacci 23.6% retracement of the latest downtrend) aligns as the next bearish target. In case this level turns into resistance, additional losses toward 1.0900 (psychological level) and 1.0840 (static level) could be witnessed.

On the upside, strong resistance seems to have formed at 1.1000 (psychological level, Fibonacci 38.2% retracement, 50-period SMA) ahead of 1.1020 (100-period SMA) and 1.1040 (Fibonacci 50% retracement).