EUR/USD Forecast: Euro could struggle to hold above 1.0800 on weak growth figures

• EUR/USD trades slightly above 1.0800 following Monday's decline.
• Near-term technical outlook suggests that the bearish bias remains intact.
• Disappointing growth figures from Germany and Euro area could further weigh on the Euro.

EUR/USD started the week on the back foot and touched its lowest level since mid-December below 1.0800 in the early American session on Monday. Although the pair manages to hold above this level in the European morning on Tuesday, it risks losing it in case European data disappoint.

Mixed comments from European Central Bank (ECB) officials weighed on the Euro on Monday. ECB Vice President Luis de Guindos said inflation risks were tilted to the downside and ECB policymaker Mario Centeno argued that the central bank should start cutting rate sooner than later, while avoiding abrupt moves. On a hawkish note, Governing Council member Peter Kazimir said that a rate cut in June is more probable than April but the exact timing is secondary to the decision's impact.

Later in the session, fourth-quarter Gross Domestic Product (GDP) data for Germany and the Eurozone will be watched closely by market participants.

Investors expect the German economy to shrink by 0.2% on an annual basis and see the European economy stagnate in the same period. A bigger-than-forecast contraction in German GDP or a negative European GDP print could feed into expectations for an ECB rate reduction in April and force EUR/USD to stretch lower.

In the second half of the day, JOLTS Job Openings data for December and the Conference Board's Consumer Confidence Index for January will be featured in the US economic docket. Investors, however, could refrain from taking large positions ahead of the Federal Reserve's policy announcements on Wednesday. Nevertheless, the US Dollar could stay resilient against its rivals unless risk flows start to dominate the action.

EUR/USD Technical Analysis

EUR/USD faces critical support at 1.0800 (Fibonacci 50% retracement of the latest uptrend). A daily close below this level could attract technical sellers and open the door for another leg lower toward 1.0740 (static level) and 1.0700 (Fibonacci 61.8% retracement).

On the upside, 1.0850 (50-period Simple Moving Average (SMA), descending trend line) aligns as first resistance ahead of 1.0900 (psychological level, 100-period SMA) and 1.0940 (200-period SMA).