EUR/USD Forecast: Lower lows at sight amid yields’ strength

EUR/USD Current Price: 1.1733

• The EU March Economic Sentiment Indicator improved to 101 from 93.4.
• US March CB Consumer Confidence is foreseen at 96.9.
• EUR/USD set to extend its decline amid government yields boosting the dollar.

The EUR/USD pair trades at fresh 2021 lows in the 1.1730 price zone ahead of the US opening, as rising US Treasury yields boost the greenback. The yield on the 10-year note hit 1.77%, a level that was last seen in February 2020. There was no particular catalyst behind the latest yields’ run, but easing concerns and mounting hopes for an economic comeback. The cold numbers, however, indicate that inflation remains well-subdued among major economies, and investors may be too optimistic.

European data was mostly encouraging, as the EU March Economic Sentiment Indicator improved to 101 from 93.4, beating expectations. German inflation came as expected at 1.7% YoY in March, according to preliminary estimates. The US will publish some minor figures and CB Consumer Confidence, foreseen at 96.9 in March from 91.3 in the previous month.

EUR/USD short-term technical outlook

The EUR/USD pair has room to extend its decline. The 4-hour chart shows that the price keeps falling below bearish moving averages, with the 20 SMA capping advances around 1.1775. Technical indicators head firmly lower within negative levels, with the RSI currently at 29, maintaining its bearish momentum. A steeper decline should be expected on a break below 1.1720, the immediate support.

Support levels: 1.1720 1.1680 1.1630

Resistance levels: 1.1775 1.1820 1.1860

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