Bears maintain pressure below 1.1000

EUR/USD Current Price: 1.0982

• European macroeconomic data fails to impress and trigger euro demand.
• Several Federal Reserve officials will be on hand during the US session.
• EUR/USD consolidates losses just below 1.1000, lows seen once below 1.0960.

The US dollar (USD) maintained its positive momentum at the weekly open, trailing higher against the euro, although the pair remained in a limited intraday range. The greenback rose on Friday after the Nonfarm Payrolls (NFP) report showed that the United States (US) labor market is much healthier than feared. The world’s largest economy is in good shape, and the Federal Reserve (Fed) will not need to proceed with aggressive interest rate cuts. Odds for a 50 basis point (bps) cut have fallen to around 5% for November, with 25bps cuts now expected in the next meeting.

Meanwhile, European stock markets are trading sour, hurt by escalating tensions in the Middle East. Israel and Iran continued their attacks on each other throughout the weekend with no potential deal in sight. The conflict may finally take its toll on financial markets and push investors to safety, although the only notable thing at the time is the upward pressure on crude oil prices.

On the data front, the Eurozone released Sentix Investor Confidence in October, which improved to -13.8 from -15.4 in September. August retail sales in the EU also rose 0.2% on the month and 0.8% from a year earlier. German factory orders, on the other hand, fell 5.8 percent in August from a month earlier and 3.9 percent over the past 12 months.

The upcoming US session will bring little interest as the macroeconomic calendar includes only a few Fed speakers. Later in the week, the United States (US) will release September’s Consumer Price Index (CPI), a key measure of inflation, although not the Fed’s favorite. However, the numbers tend to have an impact on the FX board, as investors look at the numbers as an indication of the Fed’s next monetary policy decision.

EUR/USD short-term technical outlook

Technically, the daily chart for the EUR/USD pair shows that it has pulled back towards a broken daily uptrend line on Friday. The trendline, coming from 1.0665, the June monthly low, is currently offering resistance around 1.0990. At the same time, technical indicators remain in negative levels, losing their downward power, but continue to move lower. Finally, a 20 simple moving average (SMA) extended its slide around 1.1090, reflecting sellers’ control, while the 100 and 200 SMAs dipped below the current price.

In the short term, and according to the 4-hour chart, the risk for EUR/USD is to the downside. A bearish 20 SMA is firmly headed down, well below the 100 and 200 SMAs, which are also gaining downside power. At the same time, technical indicators have stabilized, albeit in negative terms, with no visible signs of a potential recovery.

Support levels: 1.0960 1.0920 1.0885

Resistance levels: 1.0990 1.1040 1.1085