EUR / USD extends retracement and approaches 1.1800

• The EUR / USD with the bearish tone, but still above 1.1800.
• Data: German IFO business climate weakens in October, new home sales figures coming from US and Chicago Fed.

He EUR / USD is falling on Monday after Friday’s bounce. It hit a low for the day at 1.1803 and then bounced. It is trading at 1.1815, more than 40 pips below Friday’s close.

The bearish bias remains in place, but with EUR / USD hovering above 1.1800. A dip below will increase the downward pressure, with the next support at 1.1790 and then 1.1765. In the opposite direction, the first resistance is at 1.1830, followed by 1.1865 (October 22-23 highs).

Ehe dollar started the week on the right foot in the face of a fall in stocks and despite the decline in Treasury yields. Low expectations of an agreement for more fiscal stimulus along with fears about the re-emergence of coronavirus cases and the impact of new restrictions.

Also weighing on the single currency at the beginning of the week, is the data that the IFO survey on German business climate. This showed mostly data below expectations, except for the current conditions that went from 89.2 to 90.3, the expectations fell from 97.4 to 95.

In the US today the report of October New Home Sales and the Chicago Fed Index. Attention is also focused on the electoral process for the presidential elections to be held in eight days.

Technical levels

At the moment, the pair is losing 0.40% at 1.1815 and faces the next support at 1.1688 (October 15 low) followed by 1.1612 (September 25 monthly low) and finally 1.1495 (March 9 monthly high). On the other hand, a break of 1.1880 (monthly high of October 21) would target 1.1917 (high of September 10) on the way to 1.1965 (monthly high of August 18).