Technical Analysis

EUR/USD Resumes Decline, Slips Below 0.9800

    Share on Facebook Share on Twitter

    The pair retreated on Thursday as the U.S. dollar gained momentum on the back of risk aversion and higher U.S. bond yields. The European Central Bank’s Monetary Policy Meeting Accounts revealed some “dovish” insights, which also weighed on the euro.

    At the time of writing, the EUR/USD pair is trading at the 0.9800 area, 0.8% below its opening price, having retreated from a daily high of 0.9926 and hit a low of 0.9788. The U.S. labor market showed some evidence of deterioration ahead of the government’s report. The increased to 219,000, above the market’s expectations of 200,000.

    The nonfarm payrolls figures will give a better outlook on the current situation of the labor market. Economists expect a slowdown in U.S. job growth from August’s 315,000 to 250,000 in September. If that’s the case, the Fed may start to consider decelerating the pace of rate hikes.

    Across the pond, the ECB published the , which showed some officials leaned towards a smaller hike of 50 bps in their last meeting. Additionally, the report remarked that the depreciating euro would increase inflationary pressures. Many officials called for the bank to act decisively now to prevent the need to hike at a more aggressive pace later.

    From a technical standpoint and according to the daily chart, the EUR/USD pair holds a short-term bearish perspective. The EUR/USD trades below its main moving averages, while its indicators fell into negative territory. The RSI has crossed its midline and points south, while the MACD printed a lower green bar, signaling bulls are losing momentum.

    The immediate support level for the EUR/USD is seen at the 0.9750 area, followed by the 0.9635 level, and then the cycle low at 0.9535. On the upside, the pair must regain the 20-day SMA, which stands at 0.9875. A break above the latter could pave the way to the 0.9900 zone and potentially parity.

    Originally Published Here -Source link

    0 0 votes
    Article Rating

    Rivian, Kezar, Dynatrace and more

    Previous article

    Argentina to tighten import controls to preserve dollars By Reuters

    Next article

    You may also like

    Notify of
    Inline Feedbacks
    View all comments