EUR/USD Forecast: Demand eases amid worsening sentiment

EUR/USD Current Price: 1.1713

• A dismal market mood has helped the greenback throughout the first half of the day.
• US data was slightly encouraging, but speculative interest ignored it.
• EUR/USD has eased from its weekly high,  bears remain side-lined.

The EUR/USD pair hit a weekly high of 1.1754 at the beginning of the day, as the greenback remained under selling pressure ahead of the US presidential debate. The market´s sentiment deteriorated further after the event, leading to some modest dollar’s gains. The mentioned debate provided nothing of substance for financial markets, except that US President Trump refused to say that he would accept the election results, which dented further the market’s mood.  

The pair retreated from the mentioned high, to trade around the 1.1700 level ahead of US data, and following the release of German macroeconomic figures. Retail Sales in the country were up by 3.1% in the month, better than anticipated, while the unemployment rate improved to 6.3% in September.

 The US released the ADP survey, which showed that the private sector added 749K new jobs in September, beating the market’s expectations of 650K. The country also published the final reading of Q2 GDP, which resulted in -31.4% slightly better than the previous estimate of -31.7%. US figures had a limited impact on the pair, although equities ticked higher with the news.

EUR/USD short-term technical outlook

The EUR/USD pair is trading around the 38.2% retracement of its latest daily decline, after failing to surpass the 50% retracement of the same slump. The 4-hour chart shows that the pair is losing its bearish strength, but also that selling interest is limited. A bullish 20 SMA now converges with the 23.6% retracement of the mentioned decline in the 1.1670 price zone, while a bearish 100 SMA reinforces the 61.8% retracement at 1.1770. Technical indicators eased from their highs, but remain well into positive levels.

Support levels: 1.1670 1.1625 1.1590

Resistance levels: 1.1725 1.1770 1.1810

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