EUR/USD Weekly Forecast: Tapering looms in the US, dollar to keep strengthening

　　EUR/USD Weekly Forecast: Tapering looms in the US, dollar to keep strengthening

　　● Upbeat US employment-related data fueled speculation about a tighter US monetary policy.

　　● European macroeconomic figures indicate tepid economic progress in the Union.

　　● EUR/USD is technically bearish and poised to break below 1.1700.

　　The EUR/USD pair trades below the 1.1800 level, ending last week in the red. Since the latter started, attempts to advance beyond the 1.1900 level were quickly reverted, with the pair reaching lower lows on a daily basis, despite limited demand for the American currency.

　　The greenback took a hit in the previous week from the US Federal Reserve, as chief Jerome Powell cooled down hopes for soon-to-come tapering. However, it does seem like the central bank is paving the way to announce the first stage toward normal. On Wednesday, Fed Vice Chairman Richard Clarida said that the central bank is likely to hit its economic targets by the end of 2021 and start raising rates again in 2023.

　　Lighter macroeconomic week ahead

　　The upcoming week will be a lighter one in terms of first-tier data but will include some events that would further hint at economic progress at both shores of the Atlantic. Germany and the US will release updates on the Consumer Price Index on Wednesday. In addition, the European country will also publish the August ZEW Survey, with Economic Sentiment foreseen improving from 61.2 to 72, while the US has scheduled the preliminary estimate of the August Michigan Consumer Sentiment Index.

　　EUR/USD technical outlook

　　The EUR/USD pair is poised to retest the multi-month low set in March at 1.1703. The weekly chart shows that the pair is trading near July low at 1.1751, the immediate support level, and once again, it met sellers on approaches to the 61.8% retracement of the March/May rally at 1.1920. In the mentioned chart, the 20 SMA maintains a mildly bearish slope well above the current level, while the longer moving averages converge around 1.1500. Meanwhile, technical indicators remain within negative levels, the Momentum directionless but the RSI heading south at around 41.

　　On a daily basis, the risk is skewed to the downside. The pair accelerated its slump after breaking below a now bearish 20 SMA, while technical indicators crossed their midlines into negative territory, with the RSI currently at 37.

　　The pair has an immediate support level at 1.1751, followed by 1.1703. A break lower will result in a slump toward the 1.1600/40 price zone. Resistance levels are located at 1.1840 and 1.1920, with sellers likely to keep defending the latter.

　　EUR/USD sentiment poll

　　The FXStreet Forecast Poll shows that the sentiment toward the EUR/USD pair is bullish. The pair is seen rising in the three time-frames under study, although it is fair to say that most polled experts have not considered the Nonfarm Payroll report.

　　Bulls start at 38% in the weekly perspective, jump to 62% in the monthly view and decline to 47% in the three-month forecast. However, on average the pair is seen steady below the 1.1900 level.

　　The Overview chart indicates that most polled experts are on the dollars side. The three moving averages head lower, with the stronger momentum in the near-term. A few exceptionally bullish targets in the quarterly view lift the average, but most targets are around or below the current level, somehow anticipating lower lows in the docket.