EUR/USD Price Forecast: A Weaker Sentix Economic Index to Test $1.010

For the EUR, it’s a quiet morning ahead on the Eurozone economic calendar. The Sentix Economic Index for August will draw interest. The Economic Index tumbled from -15.8 to -26.4 in July, with the Expectations sub-component falling to the lowest level since December 2008.

Another sharp fall would test support for the EUR, as recession fears continue to limit any near-term upside. Economists have forecast a modest increase to -24.7 that may provide little EUR comfort.

EUR/USD Price Action

At the time of writing, the EUR was up 0.04% to $1.01842.

In a mixed start, the EUR fell to an early low of $1.10592 before rising to a high of $1.01888.

Technical Indicators

The EUR/USD needs to move through the $1.0191 pivot to target the First Major Resistance Level (R1) at $1.0241 and the Friday high of $1.0252.

The appetite for riskier assets will need to pick up to support a return to $1.020.

An extended rally would likely see the EUR/USD pair test resistance at $1.030 and the Second Major Resistance Level (R2) at $1.0302.

The Third Major Resistance Level (R3) sits at $1.0413.

Failure to move through the pivot would bring the First Major Support Level (S1) at $1.0130 into play.

An extended sell-off throughout the day could see the EUR/USD test the second Major Support Level (S2) at $1.0080 and support at $1.00.

The Third Major Support Level sits at $0.9970.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.

At the time of writing, the EUR sat below the 50-day EMA, currently at $1.01952.

The 50-day EMA pulled back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, which were negative price signals.

A move through the 50-day EMA, currently at $1.01952, to $1.02 would support a breakout from the 100-day EMA, currently at $1.02035, to target R1 ($1.0241).

However, a pullback from the 50-day EMA would leave support levels in play.

The US Session

It is a quiet day ahead, with no economic indicators for the markets to consider. With no scheduled FOMC member speeches, investors will juggle the recent string of upbeat stats with sentiment towards the Fed policy decision.

The Fed will be privy to another round of stats before the September move, which could ease Dollar demand. However, US inflation figures on Wednesday could prove telling.