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EURUSD Technical Analysis – October-20-2023

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FxNews – In today’s comprehensive EURUSD technical analysis, we will first scrutinize the current economic conditions in the Euro zone. Following that, we will meticulously delve into the details of the technical analysis pertaining to the EURUSD pair.

Euro Area Makes More Money Than It Spends

In a remarkable turnaround, the Euro Area, a group of countries that use the Euro as their currency, reported a current account surplus of EUR 30.67 billion in August 2023. This is a significant improvement from the same period in the previous year when the region faced a deficit of EUR 26.57 billion.

The surplus was largely driven by a positive shift in the goods account, which swung from a deficit of EUR 30.99 billion last year to a surplus of EUR 25.48 billion this year. This indicates that the Euro Area countries were successful in exporting more goods than they imported during this period.

In addition to this, there was a decrease in the secondary income deficit, which fell to EUR 12.22 billion from EUR 14.19 billion. Secondary income typically includes transfers like pensions and workers’ remittances.

However, it wasn’t all positive news. The services surplus saw a slight decline, falling to EUR 12.38 billion from EUR 13.09 billion. Similarly, the primary income surplus, which includes earnings from investments such as interest and dividends, also narrowed slightly to EUR 5.04 billion from EUR 5.52 billion.

Despite these minor setbacks, the overall picture for the January-August period was positive. The Euro Area posted a current account surplus of EUR 130.05 billion, marking a significant improvement from the deficit of EUR 80.18 billion recorded during the same period in 2022.

This economic turnaround signals a robust recovery for the Euro Area economies and bodes well for their future economic stability.

EURUSD Technical Analysis

The EURUSD currency pair has been on a downward trend since July 17th, extending to a low of around 1.0493 in January 2023. This decline was triggered by a breakout of the bearish channel by EURUSD bears. Currently, the pair is trading within the Ichimoku cloud, and a hammer candlestick pattern was observed two weeks ago near the support zone. Given that the stochastic oscillator is in the oversold area on the weekly chart, we might see a correction or reversal in the EURUSD futures price.

EURUSD Technical Analysis - October-20-2023

EURUSD Futures Analysis – Weekly Chart by TradingView

For a more detailed analysis of the EURUSD futures price, let’s take a closer look at the daily chart.

eurusd futures

EURUSD Futures – Daily Chart

Despite attempts by the bulls to break out of the bearish channel and pivot at 1.065, they have been unsuccessful. The pair is now trading within a range between 1.0493 and 1.065. These two key levels are crucial for the future price of EURUSD. If the bulls manage to close above the pivot, we could see a continuation of the upward momentum, with initial targets at R1 (1.081) followed by R2 (1.104).

Conversely, if the pair closes below 1.0493, we could see a continuation of the decline that began on July 17th, with a target at S1 (1.025).

  • 20 October 2023
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