Fundamental approach:
- The euro-dollar traded lower this week, pressured by a firmer US dollar and divergence in monetary policy, as the Fed became less dovish.
- At the same time, the ECB held rates steady and maintained a cautious outlook. The euro remained under pressure despite slightly better Eurozone data, with core inflation ticking up but not enough to drive expectations of an ECB rate change; meanwhile, improving risk sentiment and reduced odds of a Dec Fed cut supported the US dollar, helped in part by easing, but not fully resolved, US-China trade tensions.
- Key drivers included the Fed recent rate cut and Chairman Powell's statement that more easing is not guaranteed, which led to US dollar strength and overshadowed Eurozone retail and inflation numbers that met forecasts.
In addition, the ECB's steady rate guidance and optimistic growth forecast failed to support the euro, keeping the EURUSD near three-month lows as investors focused on central bank policy divergence and resilient US labor data.
- The pair could remain under pressure unless US data softens or the Fed's guidance shifts.
Technical approach:
- EURUSD plunged after breaking below the key level at around 1.1560. The price is below both EMAs, indicating that a bearish momentum persists.
- Remaining below the key resistance at 1.1560 may prompt a continuous decline to retest the support at 1.1400.
- Conversely, if EURUSD closes above 1.1560, the price may retest both EMAs confluence with the descending channel's upper bound.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
- The euro-dollar traded lower this week, pressured by a firmer US dollar and divergence in monetary policy, as the Fed became less dovish.
- At the same time, the ECB held rates steady and maintained a cautious outlook. The euro remained under pressure despite slightly better Eurozone data, with core inflation ticking up but not enough to drive expectations of an ECB rate change; meanwhile, improving risk sentiment and reduced odds of a Dec Fed cut supported the US dollar, helped in part by easing, but not fully resolved, US-China trade tensions.
- Key drivers included the Fed recent rate cut and Chairman Powell's statement that more easing is not guaranteed, which led to US dollar strength and overshadowed Eurozone retail and inflation numbers that met forecasts.
In addition, the ECB's steady rate guidance and optimistic growth forecast failed to support the euro, keeping the EURUSD near three-month lows as investors focused on central bank policy divergence and resilient US labor data.
- The pair could remain under pressure unless US data softens or the Fed's guidance shifts.
Technical approach:
- EURUSD plunged after breaking below the key level at around 1.1560. The price is below both EMAs, indicating that a bearish momentum persists.
- Remaining below the key resistance at 1.1560 may prompt a continuous decline to retest the support at 1.1400.
- Conversely, if EURUSD closes above 1.1560, the price may retest both EMAs confluence with the descending channel's upper bound.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
Zlecenie aktywne
Looking for the case of remaining above 1.1560 after breaking the channel's upper bound, then it will look bullish and vice versa.
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Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.