EUR/USD Forecast: Looking for a bearish breakout

EUR/USD Current Price: 1.1727

• The focus is on US President Joe Biden’s announcement on spending.
• US ADP survey came in at 517K, missing expectations but well above the previous one.
• EUR/USD is still under strong selling pressure and poised to extend its decline.

The EUR/USD pair bounced from a fresh 2021 low of 1.1703, as demand for the greenback paused ahead of US President Joe Biden’s speech. The pair peaked at 1.1747 following comments from the European Central Bank President Christine Lagarde, who said that short-term economic moves wouldn’t guide policymakers. “The market can test us as much as they want,” she said, adding that the central bank will adjust its monetary policy as needed depending on financial conditions.

However, the pair was unable to extend its advance and slowly grinds lower ahead of Wall Street’s opening, helped by the ruling cautious mood. The US has just published the March ADP survey on private jobs creation, which resulted at 517K below the 550K expected but much better than the previous 176K.  The focus remains on President Biden, expected to announce an up to $ 3 trillion spending program.  

EUR/USD short-term technical outlook

The EUR/USD pair has corrected oversold conditions and is poised to extend its decline. The 4-hour chart shows that sellers keep appearing on approaches to a bearish 20 SMA, which heads firmly lower below the longer ones. Technical indicators have resumed their declines within negative levels, in line with another leg south.

Support levels: 1.1705 1.1665 1.1620

Resistance levels: 1.1770 1.1810 1.1850  

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