EUR/USD Forecast: Fresh Lows, More to Come
The EUR/USD pair plummeted to a fresh three-week low of 1.1255, on the
back of poor EU inflation data. In April 2016, EU annual inflation fell
0.2%, whilst monthly basis, inflation remained flat at 0.0%. The common
currency was already under pressure ahead of the release, and actually
bounced modestly from the mentioned low at the time being, as investors
are waiting for the FOMC Minutes, to be released in the American
Majors have been quite choppy this month, as uncertainty over the
upcoming rate hike in the US kept rising. In one hand, data has been far
from encouraging, yet at the same time, US policy makers keep repeating
that two rate hikes this year are still on the table. Anyway, Minutes
can offer a clearer picture on the matter, but don't put too much on
In the meantime, the EUR/USD pair 4 hours chart, shows that the 20 SMA has accelerated its decline well above the current level, and while the RSI is losing downward strength near oversold territory, but is far from indicating a recovery, maintaining the risk towards the downside. The 1.1280/90 region is now the immediate resistance, with gains above it favoring an advance up to 1.1330 first, and to 1.1370 later, should the FED offer a dovish tone.
A break below the daily low on the other hand, can see the pair approaching 1.1200, whilst below the psychological support, the decline can extend down to 1.1160.