EUR/USD Forecast: Bears hesitate, but bulls nowhere to be found
EUR/USD Current Price: 1.0008
- The EU Harmonised Index of Consumer Prices rose by 9.1% YoY in August.
- The revamped ADP report showed that the US private sector added 132K positions in August.
- EUR/USD seesaws around parity without technical signs of a potential recovery.
The EUR/USD pair fell through parity during London trading hours, bottoming at 0.9970 and now battling to regain the 1.0000 mark. The American dollar gathered momentum on the back of risk aversion as stock markets turned back south following Tuesday’s gains. Government bond yields are rising, providing additional support to the greenback.
The EU reported that the Harmonised Index of Consumer Prices (HICP) rose by 9.1% YoY in August, up from 8.9% in July, while the core reading for the same period jumped to 4.3% from 4% in the previous month. Record readings had a limited impact on the EUR, as European Central Bank officials have moved ahead of the release and began jawboning about a more aggressive tightening over the weekend.
Across the pond, the US published the ADP report on private job creation, which showed the country created 132,000 new positions in August, well below the 288,000 expected. Additionally, MBA Mortgage Applications declined 3.7% in the week ended on August 26. The US will later release the August Chicago PMI, foreseen at 52 from 52.1 in the previous month.
EUR/USD short-term technical outlook
The EUR/USD pair maintains its bearish stance in the daily chart, developing below bearish moving averages. Technical indicators, in the meantime, remain well below their midlines, maintaining their downward slopes. Daily candles continue to have small bodies but hint at some selling hesitation below parity. An interim bottom could be close but is not yet confirmed.
In the near term, and according to the 4-hour chart, the pair is neutral. It is currently seesawing around a mildly bullish 20 SMA, while the longer moving averages keep heading south far above the current level. Technical indicators aim north, although the RSI remains stuck around its midline. The pair would need to extend its current recovery beyond 1.0050 to shrug off the negative stance, while below the daily low, an approach to the recent multi-year low is on the cards.
Support levels: 0.9970 0.9940 0.9895
Resistance levels: 1.0050 1.0090 1.0140
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