EURUSD Technical Analysis – October-12-2023
FxNews – In this comprehensive EURUSD market analysis, we will meticulously examine both the fundamental and technical aspects of this trading instrument, providing you with a holistic understanding of its dynamics.
EURUSD Market Analysis
FxNews – The EURUSD pair has been on an upward trend, reaching toward 1.0650 early Thursday. Despite the RSI indicator suggesting the pair is nearing an overbought condition, investors might overlook this if US inflation data is softer than expected. Market dynamics mid-week were largely influenced by risk flows, with the US Dollar struggling to maintain its position. Furthermore, dovish remarks from Federal Reserve (Fed) officials led to a decrease in US Treasury bond yields, putting additional pressure on the currency.
This week, the Euro (EUR) has shown strength against major currencies, particularly the US Dollar.
As we head into Thursday, US stock index futures are trading positively, indicating a buoyant market sentiment.
Later in the day, market participants will be closely monitoring the release of the US Consumer Price Index (CPI) data for September. The expectation is for both the CPI and the Core CPI (which excludes volatile food and energy prices) to increase by 0.3% on a monthly basis.
Currently, markets are predicting a 72% chance that the Fed will maintain the current policy rate this year, according to the CME Group FedWatch Tool. If the monthly Core CPI is weaker than anticipated, dovish Fed bets could continue to influence market activity. This could lead to an extension of the weekly rally in US stocks and further weaken the USD. Conversely, a strong Core CPI reading of 0.5% or above could trigger a correction in the USD and cause EUR/USD to lose some of its weekly gains.
EURUSD Technical Analysis
This simplified EURUSD market analysis aims to provide a clearer understanding of current market trends and expectations.
At present, the EURUSD pair is in the process of testing a significant resistance level at 1.064. This comes as part of a broader trend, with the currency pair consistently trading within a rising channel. Adding to this, from a technical perspective, the EURUSD pair is also hovering above the Ichimoku cloud. This is generally seen as a bullish signal, indicating potential for further upward movement.
Looking ahead, there are several key factors that could influence the direction of this currency pair. One of these is the upcoming US inflation data release. If this data comes in softer than expected, it could provide the catalyst needed for the EURUSD pair to break through the 1.064 resistance level. In such a scenario, the next target for the pair would be the 1.07 resistance level. This would represent a significant milestone and could potentially open up further upside potential.
In conclusion, there are several key technical and fundamental factors currently in play for the EURUSD pair. Traders will be closely watching these developments as they look to navigate this dynamic market environment.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.