EUR/USD analysis: more uncertainty ahead

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1514

Italian budget deficit weighing on the common currency.
USD dollar lacks strength enough to turn firmly bullish.

The EUR/USD pair finished the week marginally lower at 1.1513, as the greenback eased on Friday amid a better market mood and soft US data, which helped speculative interest to book gains ahead of the weekend. European equities were under pressure as tensions between the EU and Italy dominated the headlines, following comments from Italian PM Conte, who said that he sees no need to change his governments' 2019 budget. However, solid earnings among US companies partially offset the negative tone ahead of London's close. The US released Existing Home Sales for September, which fell by more-than-expected, down 3.4% from a month earlier. This Monday, the macroeconomic calendar will be quite light both shores of the Atlantic, and will only include the German Buba monthly report and the US Chicago Fed National Activity Index for September.

The pair bounced from 1.1432, the second time the pair recovers from the level this October, as investors are not ready to go long full-mode in the greenback again. In the daily chart, the pair has stalled its recovery below a bearish 20 DMA, also below the 23.6% retracement of the early October decline, while technical indicators turned higher, the Momentum now in neutral levels and the RSI at around 44, rather reflecting the latest recovery than supporting another leg higher. The 38.2% retracement of the same decline comes at around 1.1575, providing a more relevant resistance. In the 4 hours chart, technical indicators also recovered, but lost momentum after nearing their midlines, while the price is currently around a bearish 20 SMA and below the larger ones, in line with the longer term perspective.

Support levels: 1.1465 1.1430 1.1400

Resistance levels: 1.1525 1.1575 1.1620

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.