EUR/USD Forecast: Bears maintain the pressure ahead of critical US data

EUR/USD Current price: 1.0920

• Market participants keep buying the US Dollar ahead of key employment and growth figures.
• The German Unemployment Rate was confirmed at 5.9% in December.
• EUR/USD trades near the 1.0900 level and aims to break below it.

The EUR/USD pair stayed on the back foot throughout the first half of Wednesday, although the slide was moderated. The pair bottomed at 1.0915  during European trading hours and maintains the sour tone heading into Wall Street’s opening, as investors are cautiously awaiting first-tier figures.

So far, the macroeconomic calendar offered the December German Unemployment Rate, which was confirmed at 5.9%, unchanged from the previous month. Additionally, the United States (US) published MBA Mortgage Applications for the week ended December 29, which plunged 10.7%. However, the decline is irrelevant, considering it occurred during the winter holidays.

After the American opening, the focus will be on the US ISM Manufacturing PMI, foreseen in December at 47.1, improving from 46.7 in November but still within contraction levels. At the same time, the country will release November JOLTS Job Openings, relevant ahead of the Nonfarm Payrolls (NFP) report on Friday. Finally, in the US afternoon, the focus will shift to the Federal Open Market Committee (FOMC) Minutes, which can provide clues on upcoming rate cuts.

EUR/USD short-term technical outlook

The EUR/USD pair bounced modestly from the aforementioned intraday low, but trades in the red. Technical readings in the daily chart suggest the decline may continue as indicators extend their slides, currently heading lower within neutral levels. At the same time, the pair is battling around a still bullish 20 Simple Moving Average (SMA), while the longer ones remain directionless far below the current level.

The near-term picture indicates that the risk skews to the downside. In the 4-hour chart, EUR/USD found near-term buyers around a directionless 200 SMA, but develops below the 20 and 100 SMAs, with the shorter one gaining downward momentum. Finally, technical indicators remain within negative levels, with the Relative Strength Index (RSI) indicator maintaining its bearish slope at around 27, without signs of exhaustion.

Support levels: 1.0910 1.0880 1.0845  

Resistance levels: 1.0950 1.0990 1.1025