Euro Forecast: EUR/USD Outlook Bearish Near Term, Bullish Long Term
Fundamental Euro Forecast: Mixed
- The bounce in EUR/USD last week looks to have run its course and a resumption of its previous slide lower is now possible.
- Longerterm, however, the pair is well placed to benefit from any US Dollar weakness as the US elections in November approach.
EUR/USD price decline likely in coming days
Last week was an important one for EUR/USD, with the bounce predicted here a week ago duly taking place. In the process, the 20-day moving average crossed below the 50-dma – a bearish technical signal – and the 14-day relative strength index, which was signaling an oversold market, is no longer doing so.
This all suggests another move lower in the coming days, when a lack of top-tier Eurozone data will leave EUR/USD traders free to concentrate on the technical picture. In fact, the only numbers of note are the final September purchasing managers’ indexes for the service sectors in Germany, France and the Eurozone as a whole.
EUR/USD Price Chart, Daily Timeframe (July 1 – October 1, 2020)
Source: Refinitiv (You can click on it for a larger image)
Longer term, however, the outlook is more positive – with caveats – as my colleague Ilya Spivak and I explain in our new DailyFX Euro Forecast guide to the fourth quarter of 2020, which we have just published. For a copy, just click on the link below to receive it in your inbox.
We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.