EUR/USD formed a bearish-pennant which targets 1.1100

• On Tuesday, the shared currency lost 0.13% amid softer EUR.
• A risk-off market mood spurred the downfall of the EUR in the middle of the New York session.
• EUR/USD Price Forecast: Neutral-bearish though the break of the bottom-trendline of the bearish-pennant would accelerate the free-fall towards 1.1100.

The EUR/USD trims Monday’s gains as the New York session ends, trading at 1.1313 at the time of writing. Wall Street’s leading stock indices finished with losses, for the first time in five days, except for the Dow Jones Industrial,  which gained 0.26%, finishing at 36,398.21.

As the end of the year approaches, price swings in the financial markets are exacerbated by thin liquidity conditions, sometimes leading to choppy trading. Since Monday, the US CDC decided to shorten quarantine time from 10 to 5 days to unfreeze domestic flights, exposing the US as the only country with those measures implemented. In France, the French Prime Minister Jean Castex said that work from home would be mandatory at least three times a week, while in the UK, PM Boris Johnson would not pull the trigger imposing restrictions, though he would be ready to act.

The positive news on that development is that a couple of studies in the UK add to the first one held in South Africa, saying that the Covid-19 Omicron variant, although highly transmissible, causes a mild illness. Additionally, people vaccinated who got infected with the new strain have a 50% to 80% probability of less likely being subject to hospitalization.

That said, amid a lack of macroeconomic information from the Eurozone and the US, the EUR/USD pair would lean in the US dollar dynamics and market sentiment.

EUR/USD Price Forecast: Technical outlook

The EUR/USD daily chart depicts the pair has a downward bias, as shown by the daily moving averages (DMAs) residing well above the spot price. Furthermore, the formation of a bearish-pennant exerts additional downside pressure on the EUR/USD pair, which targets 1.1100.

On the way south, EUR bull’s first line of defense would be 1.1300. A breach of the latter would expose the December 15 swing low at 1.1221, followed by a test of the November 24 YTD low at 1.1186, and then 1.1100.