EUR/USD analysis: fears eased, but turmoil not over yet

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1559

Modest weekly gains fell short of changing the negative tone of the pair.
US September Retail Sales to be out Monday, foreseen up by 0.3%.

The American dollar recovered Friday after being under pressure throughout the week, as fears eased. Soaring US Treasury yields took their toll on equities, alongside renewed tensions between the US and China, sending the DJIA over 1,400 points lower in just two sessions. The index, however, recovered some 300 points at the end of the week, while yields stabilized off the multi-year highs reached mid-week. The EUR/USD pair, which topped at 1.1610, closed in the 1.1550 price zone, in spite a softer-than-expected US consumer sentiment. According to the University of Michigan preliminary estimate for October, the index resulted at 99.0 vs. the previous 100.1 reading and the 100.4 expected, showing a slight deterioration on both the expectations and current-conditions metrics. EU data, on the other hand, resulted upbeat, as Industrial Production in August more than doubled the market's forecast, up by 1.0% MoM and by 0.9% from a year earlier.

Turmoil is not over. Market players are quite vulnerable to sentiment and will remain so this week. The EU won't release relevant data this Monday, while the US will unveil September Retail Sales, seen up 0.3% MoM.

The EUR/USD pair was unable to revert the negative tone despite closing the week with modest gains, as in the daily chart, the rally reversed from a major resistance area, where the pair has converging 20 and 100 SMA, and the 50% retracement of its latest slide between 1.1814 and 1.1431. Technical indicators in the mentioned chart have lost upward strength well into negative territory and after correcting oversold conditions a sign that buyers are still sidelined. In the 4 hours chart, the pair is holding a few pips above a bullish 20 SMA, while technical indicators eased sharply from overbought levels, but hold within positive levels, with the RSI currently flat at 53. The bearish case will gain potential on a break below 1.1520, a strong static support area and the 23.6% retracement of the mentioned daily decline.

Support levels: 1.1520 1.1490 1.1445

Resistance levels: 1.1590 1.1625 1.1660

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.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.