EUR/USD Price Forecast: Corrective decline underway

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0477

Financial markets started the week in slow motion, US Dollar remains weak.
United States markets will remain closed amid the celebration of President's Day.
The EUR/USD pair is under pressure in the near term and could test the 1.0400 region.

The EUR/USD pair trades just short of the 1.0500 threshold on Monday, unable to extend its recent rally yet holding ground amid persistent broad US Dollar (USD) weakness. The pair hit 1.0514 on Friday, shedding a few pips ahead of the weekly close.

European data fell short of impressing, keeping Euro (EUR) gains limited. The European Union (EU) Trade Balance posted a seasonally adjusted surplus of €14.6 billion in December, improving from the €13.3 billion posted in November.

Meanwhile, Asian and European equities are giving little clues, as most indexes trade in the green, albeit with limited movements amid the poor performance of the tech sector.

Markets’ limited activity is being exacerbated by a holiday in the United States (US) as the country celebrates President’s Day, with stocks’ and bonds’ markets closed until Tuesday.

EUR/USD short-term technical outlook

The EUR/USD pair is pretty much flat on a daily basis, trading inside a limited 30-pip range. From a technical point of view, the daily chart shows the pair holds well above its 20 Simple Moving Average (SMA), which anyway has lost its upward strength and hovers around 1.0400. The 100 SMA, in the meantime, maintains its firmly bearish slope far above the current level, suggesting longer-term sellers are still present. Finally, technical indicators show contradictory directional strength yet remain within positive levels, limiting the bearish potential in the foreseeable sessions.

In the near term, and according to the 4-hour chart, the risk of another leg south has increased. Technical indicators retreated from overbought levels, and remain within positive levels, yet the Momentum indicator heads firmly south. The Relative Strength Index (RSI) indicator, in the meantime, turned flat at around 59. Finally, the EUR/USD pair develops well above all its moving averages, with a bullish 20 SMA providing dynamic support at around 1.0440. The USD may find room to recover some ground, yet in the wider perspective the risk skews to the downside.

Support levels: 1.0440 1.0400 1.0360

Resistance levels: 1.0515 1.0550 1.0590

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 hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.