EUR/USD Forecast: Bouncing, but Downward Risk Prevails
The EUR/USD pair has bounced modestly from the 1.1285 low posted last
Friday, so far struggling to overcome the 23.6% retracement of the
latest daily decline between 1.1446 and the mentioned low around
1.1320.
Many European countries are seeing local bank holidays, due to Whit
Monday, which means volume will remain low, and there will be no
macroeconomic releases in the region. Later on the day the US will offer
some minor figures, including the New York Empire State manufacturing
index, expected at 6.5 from previous 9.56, and the NAHB Housing market
index, expected to have tick higher in May.
From a technical point of view, and according to the 4 hours chart,
technical indicators are accompanying price, recovering modestly from
oversold readings, but with no actual upward strength, whilst the 20 SMA
has crossed below the 100 and 200 SMA well above the current level,
indicating the downside is still favored.
Nevertheless a break below 1.1280 is required to confirm a bearish continuation, with the next short term supports at 1.1240 and 1.1200.
The 38.2% retracement of the mentioned decline stands at 1.1345, and is
the level to overcome to see the pair offering a more constructive
outlook, and advance towards the 1.1380/1.1400 region.
