**EUR/USD Forecast for April 8, 2024: Downward Pressure Persists**
*By Christopher Lewis – Originally published on MENAFN*
The EUR/USD currency pair continued its recent bearish trajectory on April 8, 2024, with the market experiencing a modest yet steady decline. This movement reflects a confluence of technical and fundamental factors affecting both the euro and the U.S. dollar. Given the increasing uncertainty surrounding monetary policies from both the European Central Bank (ECB) and the U.S. Federal Reserve, traders are closely watching key economic indicators and price action levels for clues on the next major move.
This detailed breakdown of the EUR/USD forecast incorporates both chart-based analysis and macroeconomic elements, providing a comprehensive view of potential market direction in the coming days.
## Current Market Overview
As of the start of the trading week on April 8, EUR/USD displayed signs of weakness, dipping further toward support levels that technical traders have been monitoring closely. The strength of the U.S. dollar continues to weigh heavily on the pair, attributed largely to ongoing speculation that the Federal Reserve may adopt a more hawkish tone compared to its European counterpart.
### Key Observations:
– EUR/USD is trading below key moving averages, reinforcing near-term bearish sentiment.
– The pair is showing limited upside momentum, suggesting a lack of bullish conviction.
– Economic data from the United States continues to surprise to the upside, supporting dollar strength.
– Concerns over the pace of economic recovery and interest rate policy divergence between the ECB and the Fed have contributed to EUR/USD’s downward drift.
## Technical Analysis
On the daily chart, EUR/USD is exhibiting signs of technical deterioration, with critical support levels coming under increased pressure. Price action over the last several sessions has shown a pattern of lower highs and lower lows, characteristic of a downward trend.
### Resistance Levels:
– 1.0850: A psychologically significant level and a previous support area. If reclaimed, it could signal a potential reversal or at least temporary stabilization.
– 1.0900: A strong resistance level, corresponding with the 50-day EMA. A break above this zone would require stronger bullish momentum, which has been notably absent.
– 1.0950 – 1.1000: Cluster resistance near the upper boundary of the recent trading range. This would only be tested if market sentiment dramatically improves for the euro.
### Support Levels:
– 1.0800: Currently under threat and could give way under continued U.S. dollar strength.
– 1.0750: A key technical support level that served as a previous bounce zone. Breakdown here could accelerate selling pressure.
– 1.0700: A round-number level that may provide temporary psychological support in case of a major selloff.
The trend-line support going back to January is being closely monitored by technical traders. A decisive break below that trend-line could trigger increased selling interest.
## Fundamental Factors Affecting EUR/USD
The EUR/USD exchange rate is being driven by the contrast in monetary policy outlooks between the European Central Bank and the Federal Reserve. Given the importance of inflation, employment data, and economic growth figures in shaping interest rate expectations, the following macroeconomic factors are playing a pivotal role in shaping EUR/USD price behavior.
### Eurozone Economic Conditions:
– The eurozone continues to post mixed economic data, with weak manufacturing and struggling consumer sentiment weighing on the euro.
– Inflation in several member states remains stubbornly above ECB targets, complicating the central bank’s path forward.
– The ECB has adopted a cautious tone, with policymakers suggesting that interest rate hikes may not be imminent, especially in light of tepid economic growth and slow recovery in key sectors.
### U.S. Economic Strength:
– The U.S. economy has shown resilience, particularly in labor markets and consumer spending trends.
– Key indicators such as Non-Farm Payrolls, ISM manufacturing, and retail sales have frequently surpassed expectations in recent weeks.
– U.S. inflation
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