EUR/USD analysis: poised to retest 1.1431
EUR/USD Current price: 1.1463
- Dollar strengthens on safe-haven demand as worldwide equities plunged.
- EUR/USD faltered at key Fibonacci resistance, bears taking over the pair.
The common currency remained under pressure throughout Thursday, with the EUR/USD pair falling to a fresh weekly low of 1.1451. A short-lived attempt to recover ground at the beginning of the London session was capped by selling interest around a Fibonacci resistance level, a sign of resurgent dollar's demand. Such advance was backed by a positive opening of European equities and an uptick in US Treasury yields. Stocks and yields, however, turned south after the American opening, with mounting concerns about slowing global economy after the Chinese stock market collapsed overnight. There were minor macroeconomic releases both shores of the Atlantic that had little effects on the pair, with a modest increase in the German's Wholesale Price Index in September, and the October US Philadelphia Fed Manufacturing Survey, which came in at 22.2, beating the market's estimates of 20.0. The pair made a second attempt to break above 1.1520 on comments from ECB's Draghi, who repeated his optimistic outlook of the local economy, but sellers pushed the price back lower.
This Friday, the EU will only offer the August Current Account, while the US will release Existing Home Sales data for September, while a couple of FOMC's members will hit the wires, nothing that can affect sentiment-related trading.
The pair trades at its lowest in over a week, and with a strong downward momentum according to technical readings in the 4 hours chart, as the price is further below sharply bearish 20 and 100 SMA, both still converging above the current level, as technical indicators resumed their slides now nearing oversold readings. Given the repeated failure to surpass the 1.1520 area, the 23.6% retracement of its latest daily decline, the pair has now room to extend its decline to 1.1430, the base of the mentioned decline.
Support levels: 1.1430 1.1400 1.1365
Resistance levels: 1.1490 1.1520 1.1575
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.
