EUR/USD analysis: at key technical juncture

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1814

The EUR/USD pair fell for a third consecutive week, ending it a 1.1814 and after trading as low as 1.1716. The common currency took a dive at the beginning of the week as a result of Angela Merkel's sour victory in the German election, which brought back concerns about rising anti-global populism within the EU. An upward corrective movement that begun on Thursday was fueled on Friday by soft US data, as the Fed's favorite inflation measure, the core PCE index for August missed market's expectations. Consumer inflation rose by 0.1% in the month, matching July's reading, but below forecast of 0.2%, while when compared to a year earlier, it came in at 1.4%, below the expected 1.5%. Also, the University of Michigan’s Index of Consumer Sentiment fell 1.7 points in September to 95.1, on concerns about the economic consequences of the latest hurricanes that hit the US. Limiting EUR's advance was worst-than-expected inflation in the area, as preliminary September estimate fell to 1.1% YoY from previous 1.3%.

The pair's decline seems still corrective in the long-term, as it´s down around 300 pips after rising roughly 1500 pretty much straight since bottoming around 1.0600 last April, and despite the latest recovery, it could extend during the upcoming days, as the pair was unable to recover beyond August bottom in the 1.1820/30 price zone. In the daily chart, technical indicators have bounced from near oversold levels, but remain within bearish territory, indicating that selling interest is limited, although the price is well below a bearish 20 SMA, around 1.1920. The pair managed to correct half of its weekly losses, with the 50% retracement of the decline at 1.1825, converging with the mentioned lows. In the 4 hours chart, the pair presents an upward potential yet to be confirmed, as the price recovered above a now flat 20 SMA, the RSI indicator holds directionless around its mid-line, and the Momentum indicator aims north near overbought levels.

Support levels: 1.1765 1.1720 1.1690

Resistance levels: 1.1830 1.1870 1.1920

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.