EUR/USD Forecast: Firmly Bearish At Fresh Monthly Lows, The Slump Is Not Over Yet

EUR/USD Current Price: 1.1740

• ECB’s Lagarde said that the economic recovery remains “very uncertain, uneven and incomplete.”
• US Federal Reserve Chief Powell will testify before Congress this week.
• EUR/USD is firmly bearish at fresh monthly lows, the slump is not over yet.

The EUR/USD pair has fallen this Monday to a fresh September low of 1.1731, holding nearby as the US session comes to an end. Equities plummeted during the European session, dragging their American counterparts alongside. Resurgent coronavirus contagions in Europe and the announcement of local lockdowns spurred concerns about economic growth. Even further, and talking about this last, ECB’s President Lagarde said that the Union’s economic recovery remains “very uncertain, uneven and incomplete.”  

The macroeconomic calendar was light, as the US only published the August Chicago Fed National Activity Index, which came in at 0.79, missing expectations of 1.95. This Tuesday, the focus will be on US Federal Reserve Chief Powell, who will testify on the CARES Act before the House Financial Services Committee. The EU, on the other hand, will publish the preliminary estimate of September Consumer Confidence, foreseen unchanged from August reading at -14.7.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is trading near the mentioned daily low heading into the Asian opening, firmly bearish according to intraday technical readings. The 4-hour chart shows that the pair has finally moved away from its moving averages, with the 20 SMA gaining bearish strength below the larger ones. Technical indicators, in the meantime, head lower near oversold levels. The immediate support level is August monthly low at 1.1695, with a break below it probably resulting in a steeper decline.

Support levels: 1.1695 1.1660 1.1620

Resistance levels: 1.1760 1.1800 1.1845

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