EUR/USD Price Forecast: Battling to retain the 1.0400 mark

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0400

ECB Governing Council member Knot hit the wires during European trading hours.
United States data was mixed, failed to make a relevant impact on the USD.
EUR/USD advances in thin trading conditions, faces resistance at around 1.0470.

The EUR/USD pair seesawed between gains and losses on Monday, finally settling at around the 1.0400 mark, posting a modest intraday slide. The US Dollar (USD) gained the most early in the American session as the market mood soured, with US indexes posting substantial slides, yet not enough to alter the dominant bullish trends.

Data-wise, investors kept an eye on Spanish inflation, as the Harmonized Index of Consumer Prices (HICP) unexpectedly rose to 2.8% on a yearly basis in December, according to preliminary estimates, reinforcing the idea of gradual interest rate cuts in the Eurozone.

Also, European Central Bank (ECB) Governing Council member Klaas Knot hit the wires and noted that “there is a chance that the Chinese will start offering their goods in Europe at lower and lower prices” should the upcoming United States (US) administration goes ahead with imposing fresh tariffs on Chinese products.

Across the pond, the United States (US) published the December Chicago Purchasing Managers’ Index, which resulted at 36.9, worse than the 42.5 expected and the previous 40.2. Also, the Dallas Fed Manufacturing Business Index in the same month improved to 3.4 from -2.7 in November. Finally, Pending Home Sales were up 6.9% in November.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of falling further. In the daily chart, the pair keeps developing below all its moving averages, with the 20 Simple Moving Average (SMA) providing dynamic resistance at around 1.0470. Technical indicators, in the meantime, have turned marginally lower within negative levels, reflecting mounting selling interest.

In the near term, and according to the 4-hour chart, the pair turned neutral-to-bearish. It trimmed intraday gains with a large bearish candle, settling afterwards below a now flat 20 SMA. Attempts to advance beyond the latter have been rejected by sellers. At the same time, the 100 and 200 SMAs maintain their bearish slopes far above the shorter one. Finally, technical indicators have turned flat below their midlines, in line with a retest of the intraday low in the upcoming sessions.

Support levels: 1.0370 1.0330 1.0290

Resistance levels: 1.0440 1.0470 1.0510

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 stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Australia unemployment rate set to edge up within overall strong labor market

The Australian monthly employment report is scheduled for release on Thursday at 00:30 GMT, and market participants anticipate a modest increase in jobs in January. The Australian Bureau of Statistics is expected to announce that the country added 20K new jobs in the month, while the Unemployment Rate is forecast at 4.2%, up from the 4.1% posted in December.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.