EUR/USD slipping back towards 1.15 on a firming Greenback

• The Euro opens the new week with the bears firmly in control.
• Long weekends will be evaporating the early week’s already-thin volume offering.

The EUR/USD is trading into 1.1510 ahead of the European continent’s Monday morning market open, after last week saw a continuation of the overall downtrend, and bullish recovery attempts see stiff opposition.

The Euro has tumbled from September’s late peak of 1.1815 as the Greenback gets bolstered by rising US Treasury yields, and the EUR/USD looks set for a continued skid below the 1.15 handle as broader markets continue to face down inflation risks from the US, which sees a hawkish Fed scrambling to lift interest rates at a quickening pace, taking the wind out of risk assets’ sails and buoying the US Dollar against the broader FX space.

Monday sees the US taking a holiday, and the economic calendar for the day will be thin in Europe, with Swiss Unemployment at 05:45 GMT (forecast 2.5%, previous 2.6%) and German Industrial Production at 06:00 GMT (previous -1.1%) being the only mid-tier data due for the day.

EUR/USD levels to watch

The Euro is primed for another decline according to technical readings, and as FXStreet’s own Valeria Bednarik noted, “the pair is technically bearish according to the daily chart, as it extended its decline below moving averages after breaking lower at the end of the previous week, while technical indicators hold directionless near oversold readings. The 20 and 100 DMA converge in a 50 pips’ range with the shortest still above the larger one, somehow indicating limited selling interest. In the shorter term, the 4 hours chart also skews the risk to the downside, as the price is now struggling with its 20 SMA while far below the larger ones, as technical indicators have stalled their recoveries below their midlines, losing upward strength. An upward corrective movement can extend up to the 1.1620 region without hurting the dominant bearish trend, while a break below 1.1460 should see it resuming.  

Support levels: 1.1500 1.1465 1.1420  

Resistance levels: 1.1550 1.1590 1.1625