Sellers take control and aim for lower minimums

EUR/USD Current Price: 1.1082

• The harmonized index of consumer prices in the euro area rose by 1.8% in the year to September.
• More Federal Reserve officials will touch the wires during US trading hours.
• EUR/USD is bearish in the short term, it may extend the slide towards 1.1000.

EUR/USD is down for a third day in a row, trading below 1.1100 ahead of the Wall Street open. The US Dollar (USD) is benefiting from a sour market mood and comments from Federal Reserve (Fed) Chairman Jerome Powell. Powell on Monday cooled expectations for another 50 basis point (bps) interest rate cut, saying the central bank was in no rush to cut rates quickly.

Meanwhile, the eurozone released its preliminary estimate of September’s harmonized index of consumer prices (HICP), which rose 1.8% in the twelve months to September, down from 2.2% in August. On a monthly basis, the index fell 0.1%. Weaker-than-expected inflation figures allow the European Central Bank (ECB) to proceed with further monetary easing, which affects the euro.

Across the Atlantic, the United States of America (US) has a busy session as it will release the Job Openings and Labor Turnover Survey (JOLTS) and the ISM Manufacturing index for September. In addition, several Fed officials will be speaking.

EUR/USD short-term technical outlook

Technically, the EUR/USD pair looks set to extend its decline. On the daily chart, the pair has broken below the 20 Simple Moving Average (SMA) now providing dynamic resistance around 1.1105. At the same time, the pair is holding above the 100 and 200 SMAs, which limits bearish potential. Finally, technical indicators turned south, reflecting persistent selling interest. The Relative Strength Index (RSI) indicator is around 48, already in negative levels and in line with lower lows ahead.

In the short term, and according to the 4-hour chart, the bear case is even clearer. EUR/USD is currently developing below all its moving averages, with intraday sellers now aligned around the 100 SMA in the 1.1110 price area. Technical indicators, meanwhile, are heading firmly lower within negative levels, anticipating another move south.

Support levels: 1.1075 1.1040 1.1000

Resistance levels: 1.1110 1.1150 1.1200