EUR/USD Forecast: US Dollar buyers keep fighting to retain control

EUR/USD Current price: 1.0948

• United States markets will remain closed amid the Martin Luther King Day holiday.
• European data disappointed, limiting the bullish potential of the Euro.
• EUR/USD is neutral-to-bearish in the near term, likely to continue ranging.

The EUR/USD pair trades uneventfully around its daily opening on Monday, with a scarce macroeconomic calendar and a holiday in the United States (US) exacerbating range trading. Investors take clues out of stocks’ behavior, with European indexes currently trading in the red. Equities started the day with a positive tone amid persistent bets the US Federal Reserve (Fed) will go on with rate cuts this year, potentially triggering the first one in March.

However, stock markets lost momentum and European indexes post modest losses at the time. Meanwhile, the US celebrates Martin Luther King Day. That means there will be no activity on Wall Street or in Treasuries.

Data-wise, Germany published the December Wholesale Price Index, which slid 0.6% MoM. The Eurozone Trade Balance posted a surplus of €14.8 billion in November, while Industrial Production in the same month declined 6.8% YoY, much worse than anticipated.

EUR/USD short-term technical outlook

The  EUR/USD pair hovers around the 1.0950 level without clear directional strength. The pair has been range trading for over a week now, and the daily chart shows that the risk skews to the downside. The 20 Simple Moving Average (SMA) turned flat, providing dynamic resistance around 1.0980. The SMA has attracted sellers pretty much since the month started. Meanwhile, the 100 and 200 SMAs lack directional strength far below the current level, reflecting the absence of directional conviction. Finally, technical indicators develop within negative levels but head nowhere.

In the near term, and according to the 4-hour chart, EUR/USD is neutral-to-bearish. It has been trading between directionless 100 and 200 SMAs for over two weeks, with a flat 20 SMA in between. Technical indicators stand below their midlines without enough strength to confirm another leg south.

Support levels: 1.0920 1.0875 1.0830

Resistance levels: 1.0980 1.1025 1.1060