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EUR/USD Price Forecast: Hits fresh low since July 29, around 1.1425 as USD stays firm
- EUR/USD attracts sellers for the third straight day amid a combination of negative factors.
- The Fed’s hawkish tilt underpins the USD, while German political risks weigh on the Euro.
- The bearish technical setup supports prospects for an extension of the depreciating move.
The EUR/USD pair remains under some selling pressure for the third straight day, touching a fresh low since July 29, around the 1.1425 region, during the Asian session on Wednesday.
The US Dollar (USD) retains its bullish undertone amid the US Federal Reserve’s (Fed) hawkish outlook and geopolitical risks. The shared currency, on the other hand, is pressured by rising political risks in Germany, which, to a larger extent, overshadow prospects for a further rate hike by the European Central Bank (ECB). This might continue to weigh on the EUR/USD pair and backs the case for an extension of the depreciating move.
From a technical perspective, last week’s breakdown below the 100-day Simple Moving Average (SMA) support was seen as a key trigger for bearish traders. Moreover, spot prices remain below a series of Fibonacci retracements clustered overhead – the 61.8% retracement at 1.1474 and the 50.0% level at 1.1519. This reinforces the downside tone even as the Relative Strength Index (RSI) at 29.7 points to slightly overstretched conditions.
Meanwhile, the Moving Average Convergence Divergence (MACD) stays in negative territory and hints at persistent selling pressure, suggesting that any attempted recovery is likely to face a hurdle at the 61.8% retracement at 1.1474. This is followed by the 50.0% level at 1.1519 and the 100-day SMA at 1.1540, while higher hurdles emerge at the 38.2% retracement at 1.1563 and the 23.6% level at 1.1619 before the cycle high around 1.1708.
On the downside, immediate support appears at the 78.6% Fibo. retracement near 1.1410, ahead of the structural floor defined by the prior swing low around 1.1329.
EUR/USD daily chart
