- EUR/USD stabilized above 1.0550 in the European session on Wednesday.
- Improving risk mood could help the Euro erase a part of its weekly losses.
- ECB board member Elderson said that the policy rate could go higher if necessary.
EUR/USD stabilized above 1.0550 early Wednesday after posting small daily losses on Tuesday. The modest improvement seen in risk mood could help the pair stage a technical correction mid-week, given the oversold conditions.
On Tuesday, the US Dollar (USD) continued to find demand as a safe haven while the sell-off in US stock markets continued. The disappointing data releases from the US, however, limited the USD's gains and allowed the pair to find support. Consumer confidence continued to weaken in September and New Home Sales declined by 8.7% in August.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the US Dollar.
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Later in the day, Durable Goods Orders data from the US will be looked upon for fresh impetus. Investors will also pay close attention to the risk perception. At the time of press, US stock index futures were up between 0.3% and 0.5%. In case Wall Street's main indexes open in positive territory on hopes of the US avoiding a government shutdown, the USD could start losing strength against its rivals.
In the meantime, European Central Bank (ECB) board member Frank Elderson told Market News International on Wednesday that interest rates could still go higher, if necessary.
EUR/USD Technical Analysis
EUR/USD was last seen trading near the lower limit of the descending regression channel and the Relative Strength Index (RSI) on the 4-hour chart was slightly below 30, pointing to oversold conditions. In case the pair stages a technica correction, 1.0600 (psychological level, 20-period Simple Moving Average (SMA), mid-point of the descending channel) could be seen as the first resistance before 1.0630 (upper limit of the descending channel, static level) and 1.0650 (50-period SMA).
On the downside, 1.0550 (lower limit of the descending channel) aligns as immediate support ahead of 1.0520 (static level from January) and 1.0500 (psychological level).
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