Slobodan Drvenica
Windsor Brokers
EUR/USD
EURUSD accelerated lower in early Monday trading, generating initial signal that two-day recovery is likely over, and larger bears are regaining control.
The notion is supported by the long shadow of Friday’s daily candle, which indicated strong upside rejection (recovery was capped by broken Fibo 38.2% of 0.9535/1.1275 rally, reverted to solid resistance and reinforced by falling 10DMA).
Larger downtrend (the pair has registered eleven consecutive weekly losses) paused for a brief consolidation on oversold daily studies but persisting strong downside pressure limited recovery attempts.
Technical studies remain in full bearish setup on daily chart, adding to signals of possible bearish continuation scenario, with break of 1.0488 (new nine-month low) to expose target at 1.0405 (50% retracement) and risk deeper drop on break.
Near-term bias is expected to remain with bears while 1.0611 barrier caps the action.
Busy calendar for this week suggests that volatility is likely to increase, with release of US Sep Manufacturing PMI being the highlight today.
The activity in manufacturing sector is expected to show slight improvement in September (47.7 f/c vs 47.6 in Aug) though the sector remains in a contraction (below 50 threshold) since November 2022, but initial signals of reversal might be developing, as the indicator gradually recovered from June’s multi-year low in past two months.
Investors will be also closely watching series of releases of reports from the US labor sector this week (JOLTS; ADP; NFP) which will provide more evidence about the conditions in the sector and contribute to Fed’s creation of the monetary policy in coming months.
Res: 1.0598; 1.0617; 1.0652; 1.0700.
Sup: 1.0483; 1.0405; 1.0284; 1.0200.
Interested in EUR/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Recommended Content
Editors’ Picks
EUR/USD falls toward 1.0800 as USD gathers strength
EUR/USD came under renewed bearish pressure and declined toward 1.0800 in the American session on Monday. The bearish opening in Wall Street confirmed risk-averse conditions and provided a boost to the USD, causing the pair to stretch lower.
Gold price extends correction from all-time highs, drops below $2,050
Gold price staged a deep correction from the record top it set near $2,150 and declined below $2,050. Recovering US Treasury bond yields and risk aversion help the USD find demand and make it difficult for XAU/USD to shake off the selling pressure.
GBP/USD closes in on 1.2600 as mood sours
GBP/USD stays on the back foot and trades near 1.2600 in the American session. The US Dollar continues to find demand as a safe haven and weighs on the pair while major equity indexes in the US push lower after the opening bell.
Bitcoin price could revisit $45,000 according to crypto analyst
Bitcoin price crossed the $41,000 mark on Binance, in its ongoing uptrend. BTC price rally is likely driven by the anticipation of Spot Bitcoin ETF approval. There are more catalysts driving BTC price gains in the current cycle.
The week ahead – US Nonfarm Payrolls, RBA and BoC in spotlight
Last month’s October jobs report was the first one this year when the headline number came in below market expectations, though not by enough to raise concerns over the resilience of the US economy.