EUR/USD Forecast: Pressure remains despite limited dollar’s demand

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1286

Depressed US Treasury yields prevent the greenback from resuming its advance.
Germany Factory Orders fell by 1% YoY in October, much worse than anticipated.
EUR/USD is at risk of falling further, needs to piece the immediate support at 1.1260.

The EUR/USD pair trades just below the 1.1300 threshold, having peaked at 1.1309 during the London session. Major pairs depend on the dollar, with the latter tied to US government bond yields. The yield on the 10-year Treasury note kicked started the week at 1.378%, currently hovering around 1.39%. Its soft tone keeps the greenback away from its daily highs, although major pairs are confined to tight intraday ranges.

On the data front, Germany published October Factory Orders, which came in much worse than anticipated, down 1% YoY vs a 21% advance expected. The monthly reading printed at -6.9%, well below the -0.5% expected. The US would not publish macroeconomic figures but will auction near-term government bonds.

EUR/USD short-term technical outlook

The EUR/USD pair trades in the 1.1280 region after meeting sellers around a Fibonacci level, the 23.6% retracement of the November slump. The near term picture is bearish, given that, in the 4-hour chart, the pair retreated after testing its 20 and 100 SMAs, both converging and heading lower around the daily high. In the meantime, technical indicators remain directionless within negative levels, maintaining the risk skewed to the downside without confirming a bearish movement yet.

Support levels: 1.1260 1.1210 1.1165

Resistance levels: 1.1310 1.1345 1.1380

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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