Saturday, September 23, 2023

Euro starts to extend sideways movement

  • EUR/USD remains directionless in the second half of the week.
  • The pair is likely to find a strong resistance at 1.0750.
  • The US Department of Labor will publish weekly data on initial claims for unemployment benefits.

EUR/USD continued to move up and down in its narrow weekly range on Thursday as investors stood on the sidelines waiting for the next catalyst. The technical outlook suggests that the buyers may try to remain active.

The observed positive change in risk sentiment helped EUR/USD to hold its position in the middle of the week. however, Unexpected decision of Bank of Canada (BOC) Raising its official interest rate by 25 basis points (bps) on Wednesday lifted US Treasury yields and helped the dollar find demand, limiting the pair’s gains.

Early Thursday, the Euro Stoxx 50 index traded flat and US stock index futures posted small gains. The risk-neutral climate does not allow the dollar to outperform its rivals, forcing the EUR/USD pair to prolong its sideways movement.

Will publish US economic agenda Initial Claims for Weekly Unemployment Benefits, While these data are unlikely to affect market pricing of the Federal Reserve’s (Fed) upcoming monetary policy decision, they could trigger a short-term reaction. A significant increase in the number of applications for unemployment benefits above 30,000 could weigh on the dollar and vice versa.

Meanwhile, CME Group’s FedWatch tool shows markets are continuing to be volatile Pricing the likelihood that the Fed will leave its policy rate unchanged at around 70% After the much anticipated meeting next week.

EUR/USD Technical Analysis

On the four-hour chart, the Relative Strength Index (RSI) broke above the 50 mark and the pair euro/usd The last four-hour candle closed above the 20 and 50 Simple Moving Averages (SMA), which shows an upward trend,

However, EUR/USD is likely to face stiff resistance in the market 1.0745/50, where the 10-period SMA and the 23.6% Fibonacci retracement level align the last downtrend. above that level, 1.0770 (static level) can be considered as an interim resistance before 1.0800 (38.2% Fibonacci retracement, psychological level).

Below, 1.0700 (20-period SMA, 50-period SMA) is the first support 1.0670 (the upper boundary of the descending channel) and 1.0650 (end point of the last downtrend).

World Nation News Desk
World Nation News Desk
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