EUR/USD Forecast: Firmly Anchored To Its Bearish Path, Could Extend Its Decline To 1.1460/70

EUR/USD Current Price: 1.1632

• Markit revised October Manufacturing PMIs for the EU and the US.
• Equities struggle to recover some of the ground lost last week.
• EUR/USD is firmly anchored to its bearish path, could extend its decline to 1.1460/70.

The EUR/USD pair reached a fresh multi-week low of 1.1621, despite encouraging European data. The week started with a dismal mood after more European countries announced lockdowns to curb the coronavirus contagions. Also, the looming US presidential election forces investors into the caution corner, as there are good chances that the final result of the election will be known in a few days.

Markit published the final versions of the October Manufacturing PMIs. The EU index came in at 54.8, better than the previous estimate of 54.4. The German Manufacturing PMI came in at 58.2. In the US, manufacturing output was revised from 53.3 to 53.4. The official  ISM Manufacturing PMI jumped to 59.4 from 55.4 in September, providing additional support to the American currency. Better than anticipated US data helped equities to bounce although gains were limited.

This Tuesday, the European calendar has nothing to offer, and the focus will clearly be on the US presidential election, although the initial results will be out early Wednesday during the Asian session. The country will publish some minor reports, with September Factory Orders foreseen at 1% from 0.7% in August.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair remains in the bearish path, trading near the mentioned daily low. The 4-hour chart shows that technical indicators hold near oversold levels, lacking clear directional strength. The 20 SMA maintains a sharp bearish slope, now around 1.1680 and well below the larger ones. The pair could extend its decline towards the 1.1460/70 area ahead of the first-tier events scheduled for later this week.

Support levels:  1.1620 1.1575 1.1530

Resistance levels: 1.1680 1.1720 1.1770

View Live Chart for the EUR/USD

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