EUR/USD Forecast: Ready to challenge 2019 low at 1.0878

EUR/USD Current Price: 1.0915

• EU February Sentix Confidence Index came in at 5.2, above the expected 4.
• Market players concerned about how the coronavirus outbreak could affect global growth.
• EUR/USD bearish but oversold conditions lift odds for an upward corrective movement.  

The week has started as usual in slow motion, with the market still focused on the Chinese coronavirus outbreak and how it could affect global economic growth. The EUR/USD pair extended its decline to a fresh 2020 low of 1.0910, ending the American session not far above the level. The macroeconomic calendar had little to offer, as the US didn’t release relevant data, while the EU published the February Sentix Confidence Index, which came in at 5.2, surpassing the expected 4, although below the previous 7.6.

This Tuesday, attention will shift to US Federal Reserve Chief Powell’s testimony before the Congress. His prepared remarks will be published ahead of the event, although Powell will be submitted to an extensive Q&A after reading his comments. The European Commission will release Economic Growth Forecast earlier in the day, which may add pressure on the shared currency.

EUR/USD short-term technical outlook

The Euro was among the worst performers this Monday, and despite oversold, it still has room to extend its slide against the greenback. The 4-hour chart for the pair shows that it continued to fall below bearish moving averages, with the 20 SMA currently at around 1.0970. Technical indicators consolidate within oversold levels, but with no signs of bearish exhaustion. The pair has fallen for six consecutive days, which means the risk of a corrective movement is high. Nevertheless, the dominant trend is to the downside, with a break below 1.0878, 2019 low, probably triggering stops and fueling the slump.

Support levels: 1.0910 1.0875 1.0840

Resistance levels: 1.0980 1.1020 1.1060

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