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EUR/USD Forecast: Heading into Fed’s announcement at yearly lows
ANALYSIS | Published Jan 29, 2020 13:43 (+00:00)
EUR/USD Current Price: 1.0997
German GFK Consumer Confidence Survey beat expectations at 9.9 in February.
US Federal Reserve upcoming announcement keeping markets in pause.
EUR/USD bearish could accelerate the slide on a break below 1.0980.
The EUR/USD pair has hovered around the 1.1000 figure during the first half of the day, as speculative interest entered wait-and-see mode ahead central banks’ announcements, starting today with the US Federal Reserve.
So far, the macroeconomic calendar offered the German GFK Consumer Confidence Survey, which improved to 9.9 in February, surpassing the market’s expectations of 9.6. The US has just published the preliminary estimate of December Wholesale Inventories, which came in at -0.1%, and the Goods Trade Balance for the same month with the deficit widening to $68.33B from $62.99, slightly better than expected.
Later today, the country will publish Pending Home Sales, foreseen up by 0.5% in December. More relevantly, the Federal Reserve will announce its latest decision on monetary policy. After presenting fresh forecasts in December and hinting an on-hold stance for this year, the market is heading into the event with little expectations. If something, investors are waiting for some clarity about future developments related to the balance sheet within Chief Powell press conference.
EUR/USD short-term technical outlook
The EUR/USD pair is pressuring its daily lows ahead of Wall Street’s opening, retaining its bearish tone. In the 4-hour chart, a bearish 20 SMA continues to cap the upside, providing resistance at around 1.1020. Technical indicators in the mentioned time-frame hold within negative levels, the Momentum retreating from its mid-line and the RSI hovering around 30. The main support is 1.0980, where the pair bottomed by the end of November, with a break below it hinting a downward extension toward the 1.0900 figure.
Support levels: 1.0980 1.0950 1.0910
Resistance levels: 1.1020 1.1065 1.1100