EURUSD Technical Analysis – October-13-2023
FxNews – In our latest EURUSD Market Analysis, we’ve observed some interesting trends. The EURUSD currency pair, a key indicator in forex trading, has recently closed below the pivot in the 4-hour chart. This is a significant development as it’s currently testing the broken channel.
For those new to forex trading, the pivot point is a technical analysis indicator used to determine the overall trend of the market over different time frames. The pivot point itself is simply the average of the high, low, and closing prices from the previous trading day. On the subsequent day, trading above the pivot point is thought to indicate ongoing bullish sentiment, while trading below the pivot point indicates bearish sentiment.
The Relative Strength Index (RSI), another crucial tool in market analysis, is currently hovering below the 50 level for the EURUSD pair. The RSI is a momentum oscillator that measures the speed and change of price movements. Traditionally, readings over 70 are considered overbought, and readings under 30 are considered oversold. However, in trending markets, a reading above 50 can indicate that the uptrend is in good health and likely to continue.
Given these factors, it’s likely for the downtrend to continue targeting 1.049 followed by 1.039. These figures represent significant levels of support that could potentially halt or reverse the downtrend.
On the flip side, 1.05851 plays as resistance. This means that this price level is where an uptrend could be expected to pause due to a concentration of supply (or sellers). If the currency pair breaks this level, it would invalidate our bearish scenario.
In conclusion, our EURUSD Market Analysis suggests a potential continuation of the downtrend. However, as with all forms of trading analysis, it’s essential to use other indicators and methods to confirm these findings and always trade responsibly.
EURUSD Market Analysis: Fundamentals
Reuters – The Euro, the single currency used by the majority of European countries, is currently striving to maintain its value at 1.05. This comes after a recent surge in pressure following the announcement of Consumer Inflation in the United States.
Inflationary pressures refer to the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation — and avoid deflation — in order to keep the economy running smoothly. Although these pressures have significantly decreased, they remain at levels that are causing concern for the US Federal Reserve. The announcement of a slightly higher-than-expected consumer inflation led to an increase in US Treasury yields, which in turn strengthened the US currency.
The market’s behavior yesterday largely confirmed our predictions as we expressed considerable skepticism about whether the recent reaction of the European currency could have a more extensive and lasting impact. Today’s agenda includes industrial production in the eurozone, a speech by President Lagarde, and then the announcement of Consumer sentiment in the United States. Industrial production is a measure of output of the industrial sector of the economy. It includes mining, manufacturing, energy and construction.
The general climate continues to favor the US currency due to several factors. The US economy is growing at a faster pace compared to Europe, high yields are offered by US government debt securities, and there’s an atmosphere of uncertainty which traditionally strengthens the US currency as it acts as a safe haven currency.
Barring any major surprises in upcoming announcements, it would be unlikely to see any extreme market behaviors as we close out the week. The most probable scenario is that the exchange rate will hover around 1.05 – 1.06 without breaking past lows of 1.0450.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.