EUR/USD Price Forecast: Sellers pause ahead of FOMC Minutes

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1634

Market players await fresh clues from Federal Reserve’s officials.
French deficit crisis continues to undermine demand for the EUR.
EUR/USD bounced modestly after flirting with the 1.1600 mark.

The EUR/USD pair fell towards the 1.1600 level during European trading hours on Wednesday, as demand for the US Dollar (USD) continues on the back of a dismal market mood. The Greenback lost some ground ahead of the American opening, with the pair currently trading at around the 1.1630 level, still down for the day.

Market’s concerns revolve around the extended United States (US) government shutdown, but also around the French crisis, as the country seems unable to find a Prime Minister who can resolve the country’s massive debt.

Meanwhile, fresh headlines related to the European Union (EU) and the US trade relationship weighed on the Euro. According to people familiar with the matter, Bloomberg reported that fresh US demands for concessions could undermine the recent trade agreement.

Other than that, market participants are eager to hear from Federal Reserve (Fed) officials. On the one hand, the Federal Open Market Committee (FOMC) will release the minutes of the September meeting. On the other hand, different policymakers will hit the wires, participating in different public events. Also in the American afternoon, the European Central Bank (ECB) President, Christine Lagarde, is due to speak in a pre-recorded video at an academic event hosted by the Luxembourg Chamber of Commerce.

Speculative interest hopes Fed speakers could shed some light on upcoming monetary policy decisions. A 25 basis points (bps) interest rate cut has been largely priced in, meaning investors will be seeking clues on potentially larger cuts.

EUR/USD short-term technical outlook

The EUR/USD pair trades in the red for the third consecutive day, and the risk of a downward extension has increased. In the daily chart, EUR/USD is struggling to remain above a mildly bullish 100 Simple Moving Average (SMA), challenging it for the first time since last March. The 20 SMA, in the meantime, gains modest downward traction well-above the current level. Finally, technical indicators extend their slides within negative levels, with uneven bearish strength, but still favoring lower lows ahead.

In the near term, and according to the 4-hour chart, EUR/USD corrects oversold conditions, but there are no signs the recovery could continue, as technical indicators are losing their upward slopes well below their midlines. Other than that, a firmly bearish 20 SMA heads firmly lower after crossing below the longer ones, usually a sign of increased selling interest.

Support levels: 1.1590 1.1550 1.1510

Resistance levels: 1.1665 1.1710 1.1745

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 keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.