EUR/USD analysis: market still optimistic about the dollar
|EUR/USD Current price: 1.1787
The EUR/USD pair closed the day with gains for the first time this week, but below the 1.1800 threshold, around 1.1780, as the market took some profits out of the table from the recent dollar's rally. The greenback eased against all of its major rivals, with no clear catalyst behind the correction, as markets' participants are quite optimistic about the US future, as a result of the US Federal Reserve offering a hawkish tilt of its monetary policy upcoming decisions, and President Trump tax reform proposal. The macroeconomic calendar had plenty to offer, but the pair's reaction to such headlines was quite limited. German inflation was weaker-than-expected in September, up 1.8% year-on-year, below market's forecast of 1.9%, cooling a bit further expectations of QE tapering in the area. For the EU, and in the same month, the economic sentiment index rose to 113.0 from 111.9 in August, the highest reading in more than 10 years, although consumer confidence came in at -1.2, as expected. In the US, the final reading of Q2 GDP resulted at 3.1%, slightly better than the 3.0% expected, but rising unemployment claims, and wholesale inventories, offset the positive review.
Overall, the sentiment towards the dollar remains firmly positive, and this Thursday's decline seems mostly corrective, as the daily advance stalled right around the 38.2% retracement of this week's decline, around 1.1800. Short term, the 4 hour chart shows that the price was unable to recover above a bearish 20 SMA, while the Momentum indicator aims north, pressuring its mid-line, while the RSI indicator lost directional strength, now flat around 43, and after correcting oversold conditions. The pair could extend its corrective movement on an advance beyond the mentioned Fibonacci resistance, with scope then to extend its recovery up to 1.1852, the 61.8% retracement of the same slide. The immediate support is 1.1765, followed by the 1.1720 region, where the pair bottomed multiple times during the last two days.
Support levels: 1.1765 1.1720 1.1690
Resistance levels: 1.1800 1.1850 1.1890
View Live Chart for the EUR/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.