EUR/USD might potentially test 1.1575 – UOB Group

FXStreet Insights Team FXStreet

Euro (EUR) could drop below the 1.1595 support level, potentially testing 1.1575. In the longer run, downward momentum has increased further, but not significantly; for a continued decline, EUR must first close below 1.1595, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum has increased further

24-HOUR VIEW: "Following EUR’s price movements two days ago, we noted yesterday that 'momentum indicators are turning flat.' We expected EUR to 'trade in a range between 1.1630 and 1.1680.' Our assessments were incorrect, as EUR dipped to 1.1623, rebounded to 1.1662, and then dropped sharply to a low of 1.1598. EUR closed on a soft note at 1.1605 (-0.39%). Today, EUR could drop below the 1.1595 support level, potentially testing 1.1575. Resistance is at 1.1630, followed by 1.1650."

1-3 WEEKS VIEW: "Our most recent narrative was from two days ago (20 Aug, spot at 1.1645), in which we highlighted that 'there has been a tentative increase in downward momentum.' We also highlighted that 'as long as EUR holds below the ‘strong resistance’ level, currently at 1.1705, it could edge lower and test the major support at 1.1595.' We were not wrong, as EUR fell to a low of 1.1598 yesterday. Downward momentum has increased further, but not significantly. For a continued decline, EUR must first close below 1.1595. The likelihood of EUR closing below 1.1595 will remain intact as long as 1.1675 (‘strong resistance’ level previously at 1.1705) is not breached. Looking ahead, the next levels to watch below 1.1595 are 1.1575 and 1.1540."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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.