EUR/USD Forecast: US data to set the tone for the day

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0560

The US will publish January Durable Goods Orders, expected to have fallen sharply.
European stock markets shrugged off the sour tone of their Asian counterparts and advance.
EUR/USD bounced modestly from a fresh monthly low, no signs of further gains ahead.

The EUR/USD pair slid to 1.0532 early on Monday as the US Dollar extended its last week’s momentum at the beginning of the new week. A Hotter-than-anticipated United States Personal Consumption Expenditures (PCE) Price Index released on Friday fueled demand for the American currency as financial markets anticipate monetary tightening will continue well into this year. Hopes that the US Federal Reserve (Fed) could pivot diluted with January data and the FOMC Meeting outcome from early February.

Asian stock markets stand in the red, although European ones hold on to modest intraday gains, leading to an advance in US futures. Raising equities are weighing on the USD demand in the near term, with EUR/USD currently trading at around 1.0560.

Unimpressive European data prevented the Euro from advancing further. The Economic Sentiment Indicator contracted to 99.7 in February from 99.8 in the previous month and missed the market expectation of 101. Additionally, M3 Money Supply was up 3.5% YoY in January, below the 3.9% anticipated by market participants. Attention is now on US Durable Goods Orders, expected to have declined by 4% in January, much worse than the previous 5.6% advance. The country will also publish January Pending Home Sales later in the American session.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows that it consolidates last week’s losses. Technical indicators lack directional strength, but hold within negative levels, indicating absent buying interest. At the same time, the pair continues to develop below a bearish 20 Simple Moving Average (SMA), while the 100 SMA maintains a mildly bullish slope below the current level. At the same time, the pair approaches the 50% Fibonacci retracement of the 2022 slide at 1.0515, a strong static support level.

In the near term, and according to the 4-hour chart, the risk is skewed to the downside. The pair develops below all its moving averages, with the 20 SMA accelerating south below the longer ones and providing dynamic resistance at around 1.0590. The Momentum indicator remains flat below its 100 SMA while the Relative Strength Index (RSI) indicator bounced just modestly from oversold levels, not enough to support another leg higher.

Support levels: 1.0515 1.0470 1.0420

Resistance levels: 1.0590 1.0640 1.0695

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 extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

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 pushes back above $5,000

The daily chart shows spot Gold in a parabolic uptrend that accelerated sharply from the $4,600 area in late January, printing a record high at $5,598.25 before a violent reversal erased nearly $1,000 in value during the final days of the month.

Litecoin eyes $50 as heavy losses weigh on investors

Following a strong downtrend across the crypto market over the past week, Litecoin holders are under immense pressure. The Bitcoin fork has trimmed about $1.81 billion from its market capitalization since the beginning of the year, sending it below the top 20 cryptos by market cap.

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.