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The pair recorded a decrease on Friday, erased nearly 35 pips to a closing price of 1.1225. The single currency, however, managed to break the two-week losing streak, having in mind that the session opened at 1.1156. RSI wiped positions as the pair was trading within the average values. Support is located at 1.1105 and resistance is seen at 1.1280.
On the last Friday’s session the EURUSD went back and forward without any clear direction however close in the red, in the middle of the daily range, in addition closed within Thursday’s range, which suggests being clearly neutral, neither side is showing control.
The pair is trading above the 10, 50 and the 200-day moving averages that are acting as dynamic supports.
The key levels to watch are: a daily resistance at 1.1460, a 61.8% Fibonacci retracement at 1.1347 (resistance), a daily support at 1.1237, the 10-day moving average at 1.1194 (support), and a daily support at 1.1097.
EUR/USD Holds above 1.1200, Rallies on Brainard Comments
After again finding support above the 1.1200 level on Monday, the dollar weakened after initially dovish comments from Fed’s Brainard with fragile risk appetite also curbing Euro selling.
Latest COT positioning data recorded a net increase in Euro shorts for the second successive week with the number of contracts rising back to above 90,000, maintaining the risk of short covering if the Euro proves resilient at lower levels.
Overall risk appetite remained very fragile during the European session and there were fresh concerns surrounding the Eurozone economy. Deteriorating risk appetite undermined commodity currencies, which triggered wider dollar gains.
Weaker risk appetite, however, also discourages carry trades and this tends to underpin the Euro with a closing of carry trades funded through the single currency.
Atlanta Fed President Lockhart remained generally upbeat over the outlook and called for a serious discussion over the merits of a rate hike at September’s FOMC meeting. He still had some doubts over the inflation outlook, but also commented that August’s employment gain of 151,000, which was weaker than expected, was still comfortably more than enough to prevent any renewed increase in unemployment. He declined to forecast the outcome of FOMC meetings over the remainder of this year and, although the comments were relatively hawkish, the dollar was unable to gain further support.
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On September 9, the U.S. Dollar gained ground against the Euro after Boston Fed President Eric Rosengren said the Fed may have to raise rates to prevent the U.S. economy from overheating. Traders took notice of his remarks because he is usually dovish and a voting member of the FOMC.The single currency posted a volatile session against the dollar on Monday. But after all the opening price is near closing price, 1.1229 and 1.1233 respectively. The pair varied in a wide range as theintraday high was reached at 1.1267. If the euro justify negative expectations in the short term, the support 1.1197 will be overcome.
Yesterday the EURUSD went back and forward without any clear direction and closed in the middle of the weeks range, in addition managed to close within the previous day range, which suggests being clearly neutral, neither side is showing control.
The pair is trading above the 10, 50 and the 200-day moving averages that are acting as dynamic supports.
The key levels to watch are: a daily resistance at 1.1460, a 61.8% Fibonacci retracement at 1.1347 (resistance), a daily support at 1.1237, the 10-day moving average at 1.1210 (support), and a daily support at 1.1097.
Warning: today we will have ECB president Draghi speech so expect high volatility for today’s trading day.
EUR/USD Elliott Wave Count Calling for Resumption of Downtrend
The last EUR/USD Elliott Wave update called for a retracement of the downtrend from lows at 1.1131. The pair had already retraced to the 38.2% Fibonacci retracement measured from wave b highs at 1.1340, meeting the minimum requirements. A further extension in the retracement shows the pair reaching a high of 1.1327 in circle wave B prior to turning lower. The wave count has been updated to indicate the retracement to be completed, with the expectation for the next leg lower to begin.
The retracement in circle wave B was a deep retracement, reaching the 88.6% Fibonacci level, while often at this stage in the structure the retracement tends to be shallow. The deep retracement indicates that market sentiment has not fully turned as of yet, and suggests that a range may play out as markets await a catalyst for a break lower. The focus is now on circle wave A lows at 1.1131, and a break below the level should accompany a major shift in sentiment towards the pair.
Following the 55 day correction from Brexit spike lows, the new wave structure to the downside remains in its early stages still. While a strong push lower from mid-August highs has provided a strong signal that the down cycle has resumed, additional confirmation will be had upon a break of wave B lows found at 1.0976 on July 24.
The current wave count in the pair dates back to 2014 and indicates that the broader downtrend remains intact. The next target for the pair comes near the yearly range lows found at 1.05, while an eventual push to fresh multi-year lows appears probable.
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Yesterday the EURUSD went back and forward without any clear direction again and closed in the middle of the daily range, in addition managed to close within the previous day range, which suggests being clearly neutral, neither side is showing control.
The pair is trading above the 10, 50 and the 200-day moving averages that are acting as dynamic supports.
The key levels to watch are: a daily resistance at 1.1460, a 61.8% Fibonacci retracement at 1.1347 (resistance), a daily resistance at 1.1237, the 10-day moving average at 1.1212 (support), and a daily support at 1.1097.