EUR/USD: Is a Bullish Turn on the Horizon?

27 בספט׳ 2023

EUR/USD hovers near six-month lows around 1.0550 during the Wednesday European session, facing a bearish phase. Despite the decline in US Treasury bond yields, the US Dollar retains recent gains, negatively impacting the pair. EUR/USD is near the lower limit of the descending regression channel, with the 4-hour chart's Relative Strength Index (RSI) slightly below 30, indicating oversold conditions. Possible resistance levels for a technical correction are 1.0600 (psychological level, 20-period Simple Moving Average, mid-point of the descending channel), followed by 1.0630 (upper limit of the descending channel, static level), and 1.0650 (50-period Simple Moving Average). On the downside, immediate support lies at 1.0550 (lower limit of the descending channel), followed by 1.0520 (static level from January), and 1.0500 (psychological level). EUR/USD stabilized above 1.0550 on Wednesday after slight losses on Tuesday. A modest improvement in risk sentiment might aid the pair in a mid-week technical correction, considering the oversold conditions. On Tuesday, the US Dollar (USD) remained a safe-haven asset despite declining US stock markets. Disappointing data from the US limited USD gains, allowing the pair to find support. Consumer confidence declined in September, and New Home Sales dropped by 8.7% in August. Later in the day, US Durable Goods Orders data will be crucial. Investors will also closely monitor the risk perception. Currently, US stock index futures were up between 0.3% and 0.5%. If Wall Street's main indexes open positively, on hopes of the US avoiding a government shutdown, the USD could start weakening against its rivals. Meanwhile, Frank Elderson, a member of the European Central Bank (ECB) board, stated to Market News International on Wednesday that interest rates could rise further if necessary. The expectation involves waiting for a distribution and then seeking a structural upward change on M15 to enter a long position in case of a retracement to FVG. Let me know what you think, comment, and leave a like. Greetings and happy trading to everyone from Nicola, CEO of Forex48 Trading Academy.