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EUR/USD Is Poised To Extend Its Decline In The Near-Term Sub-1.1700

EUR/USD Current Price: 1.1783

  • A scarce macroeconomic calendar exacerbates risk-related trading.
  • The market’s mood is sour, with concerns centred around the pandemic and inflation.
  • EUR/USD is poised to extend its decline in the near-term sub-1.1700.

The EUR/USD pair fell to 1.1755, a fresh three-month low, bouncing just modestly to settle in the 1.1780 price zone. The dismal market mood witnessed on Monday extended throughout the first half of the day but started improving with Wall Street’s opening, as US indexes trimmed most of their previous losses. Heating US inflation and the pandemic are the main reasons behind the poor sentiment.

On the data front, the EU published the May Current Account, which posted a surplus of €11.7 billion, missing the market’s expectations. The US published June Building Permits, which fell 5.1%, while Housing Starts were up 6.3%. On Wednesday, the calendar has nothing relevant to offer, as the EU won’t publish relevant data while the EU will release weekly MBA Mortgage Applications. The calendar will have nothing relevant to offer until next Thursday when the European Central Bank will announce its monetary policy decision.

EUR/USD short-term technical outlook

The EUR/USD pair is posting lower lows on a daily basis, and the near-term picture is still bearish. The pair continues developing inside a descendant channel, and the 4-hour chart shows that sellers remain aligned around a mildly bearish 20 SMA. The longer moving averages maintain their bearish slopes well above the shorter one, while technical indicators consolidate within negative levels. The pair needs to recover beyond 1.1840 to shrug off the bearish stance, quite unlikely ahead of the ECB’s monetary policy decision on Thursday.

Support levels: 1.1755 1.1720 1.1685

Resistance levels: 1.1800 1.1840 1.1885  

Image by Harry Strauss from Pixabay

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