EUR/USD analysis: midway between monthly range
|EUR/USD Current price: 1.1933
The American dollar spent Thursday giving back part of the Fed's triggered gains, ending the day with uneven results, but down across the board, anyway. The common currency gained in spite of comments from ECB's Executive Board member Peter Praet, who said that the time has no yet come for the ECB to start winding down its massive monetary stimulus. ECB's head, Mario Draghi, was also on the wires, but said little over current monetary policy, beyond saying that monetary policy is not the right instrument to address financial imbalances in the euro zone. Backing the EUR was consumer confidence that improved from -1.5 to -1.2 in September, the highest level in about 16 years.
In the US, macroeconomic figures were mixed, as in the week ending September 16, initial jobless claims reached 259K, a decrease from the previous week's revised level of 282K. The 4-week moving average, however, was 268,750, the highest level for this average in over a year. Additionally, manufacturing firms reported an improvement in regional manufacturing conditions in September, according to the Philadelphia Fed monthly survey, with the index up for September to 23.8 from previous 18.9, also beating market's expectations of 17.9, but July's Housing Price Index came in below expected up on the month by 0.2%.
The EUR/USD pair peaked at 1.1953 to end the day in the 1.1930 region, pretty much flat for the week, midway between 1.18 and 1.21, the range established late August. Potential gains are being limited by speculation that the ECB will continue with some sort of verbal intervention on spikes through the 1.2000 level, but a dollar's steeper recovery is on doubt, weighed by political jitters and the lack of progress in the growth agenda. Technical readings in the 4 hours chart indicate that the upward potential is limited, as technical indicators have posted modest recoveries within negative territory, but remain in the red and with little directional strength, whilst the price is incapable to surpass its 20 and 100 SMAs, with the shortest providing an immediate resistance at 1.1965.
Support levels: 1.1900 1.1860 1.1820
Resistance levels: 1.1965 1.2000 1.2030
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