EUR/USD Forecast: Bears await a break below double-top neckline, near 1.1170

• EUR/USD witness some follow-through selling for the second straight session on Thursday.
• The risk-off mood benefitted the safe-haven USD and continued exerting some pressure.
• Signs of stability in equity markets helped limit further losses, at least for the time being.

The EUR/USD pair added to the previous day's losses and witnessed some follow-through selling for the second consecutive session on Thursday. The US dollar held firm on the back of risk-aversion sentiment amid worries that a surge in new coronavirus cases could trigger fresh lockdown measures. This coupled with fears of the US-EU trade war further dented the already fragile market sentiment and continued driving some safe-haven flows towards the greenback. This, in turn, was seen as one of the key factors that kept exerting some pressure on the major.

The risk sentiment did get a minor lift after the European Central Bank (ECB) announced that it will offer loans against collateral to central banks outside the euro area. The move is aimed to backstop funding markets amid the coronavirus pandemic, albeit failed to provide any meaningful respite to the shared currency.

The USD bulls maintained their dominant position after mixed US macro data, which showed that Durable Goods Orders recorded strong-than-expected growth in May as compared to 10.9% anticipated. The data was strong enough to offset a slight disappointment from the Initial Weekly Jobless Claims, which fell less than expected to 1.48 million during the week that ended June 19. Meanwhile, the final version of the GDP report confirmed that the US economy contracted by 5% annualized pace during the first quarter of 2020.

The pair slipped below the 1.1200 round-figure mark but managed to find some support at lower levels amid a late rebound in the US equity markets. The pair finally settled around 25-30 pips off daily lows and edged higher during the Asian session on Friday. In the absence of any important macro releases from the Eurozone, the pair remains at the mercy of the USD price dynamics and the broader market sentiment. Later during the early North American session, investors might take cues from the US economic docket – featuring the release of Core PCE Price Index, Personal Income/Spending data and the final version of the June Michigan Consumer Sentiment Index.

Short-term technical outlook

From a technical perspective, the pair now seems to have formed a bearish double-top chart pattern near mid-1.1300s. A subsequent fall below the 1.1175-70 support zone will confirm a near-term bearish breakdown and set the stage for a further near-term depreciating move. The pair might then accelerate the fall towards the 1.1100 round-figure mark before eventually dropping to test the very important 200-day SMA, currently near the 1.1030 region.

On the flip side, immediate resistance is now pegged near mid-1.1200s, above which the pair might aim back to reclaim the 1.1300 mark. Some follow-through buying has the potential to lift the pair back towards the 1.1350 supply zone. Bulls need to wait for a sustained breakthrough the mentioned barrier before positioning for any further near-term appreciating move. A convincing breakthrough will set the stage for a move beyond the 1.1400 round-figure mark, back towards testing YTD tops, just ahead of the key 1.1500 psychological mark.