The edges lower in early Monday’ following a triple-Doji last week that signaled strong indecision, but the action is still moving above the new 2022 low at 0.9900, posted on Aug 23.
The single currency came under pressure on the Fed’s hawkish stance, confirmed by the statement of chief Powell in Jackson Hole last Friday, though expectations that the European Central Bank might be more hawkish than expected in their September policy meeting partially offsets the negative impact and so far keeps the single currency afloat and above 0.9900 support.
Daily studies are in full bearish configuration, with a negative picture being boosted by an eventual weekly close below parity level for the first time in two decades and the pair being on track for the third consecutive strong monthly fall.
However, investors remain optimistic that the ECB will be more aggressive in September, as rising threatens to further damage the already fragile economic situation in the EU bloc. The central bank needs to intensify its fight to restore price stability.
Oversold weekly studies add hopes of a rebound, which would remain in play while the price stays above 0.9900, with a return above parity to add to initial positive signals. However, more work at the upside will be needed to sideline immediate downside risk and generate stronger bullish signals.
Res: 1.0000; 1.0024; 1.0089; 1.0122.
Sup: 0.9900; 0.9853; 0.9793; 0.9744.
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