Europe’s single currency is poised to end the week on the back foot versus its US counterpart and snap a two-week bullish phase. As of writing, the currency pair is down by -0.9%.
50-month SMA resistance
Starting from the monthly chart, the 50-month simple moving average (SMA) at US$1.1109 currently offers dynamic resistance, a line situated just south of resistance at US$1.1233. Together, this area could prove difficult to overcome. Should bulls eventually manoeuvre beyond the said area, nevertheless, and explore territory beyond the US$1.1276 peak (July 2023), this would be noteworthy and signal the beginnings of a longer-term uptrend for the pair.
Scope to continue southbound
Leaving resistance at US$1.1214 unchallenged, price action on the daily timeframe dethroned support at US$1.1127 (now marked resistance) and has opened the floor for further underperformance to support coming in at US$1.1019. This is joined by a channel resistance-turned-support line taken from the high of US$1.0916, as well as 38.2% and 61.8% Fibonacci retracement ratios at US$1.1040 and US$1.1005, respectively.
Overall, the trend is higher on the daily timeframe and the recent correction may be viewed as a dip-buying opportunity, particularly at support between US$1.1005 and US$1.1040.
H1 resistance above US$1.11
Ahead of the PCE Price Index release, we can see price action flirting with space south of the US$1.11 handle. Big figures are widely watched and traded numbers. Therefore, given that the trend is to the downside in the short term and the room seen to continue lower on the daily timeframe, a test of US$1.11 as resistance would be logical. Still, given resistance situated above US$1.11 between US$1.1113 and US$1.1111 (1.272% Fibonacci projection ratio), a whipsaw north of US$1.11 could also be seen (red arrows).
This material on this website is intended for illustrative purposes and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. Commission, interest, platform fees, dividends, variation margin and other fees and charges may apply to financial products or services available from FP Markets. The information in this website has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any financial product. Contracts for Difference (CFDs) are derivatives and can be risky; losses can exceed your initial payment and you must be able to meet all margin calls as soon as they are made. When trading CFDs you do not own or have any rights to the CFDs underlying assets.
FP Markets recommends that you seek independent advice from an appropriately qualified person before deciding to invest in or dispose of a derivative. A Product Disclosure Statement for each of the financial products is available from FP Markets can be obtained either from this website or on request from our offices and should be considered before entering into transactions with us. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354).
Recommended Content
Editors’ Picks
EUR/USD keeps its daily gains below 1.1100 post-US PCE
The slightly bearish tone in the Greenback motivates EUR/USD to maintain its constructive bias on Friday near 1.1090 in the wake of the release of the US inflation data measured by the PCE.
GBP/USD hovers around 1.3180 on US PCE data
GBP/USD maintains the positive stance in the proxiity of 1.3200 the figure amidst the marginal pullback in the US Dollar following the publication of US inflation tracked by the PCE.
Gold extends range despite US PCE inflation data miss
Gold trades mixed on Friday, edging down to trade in the $2,510s after the release of US inflation data in the form of the US Personal Consumption Expenditure (PCE) Index for July. The precious metal started the day mildly weaker after market sentiment turned positive following the release of surprisingly upbeat data from the US.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.