Languishes near monthly low, focus remains on Fed decision – Crypto News – Crypto News
Connect with us
Unlikely to hold above 0.95 – SocGen Unlikely to hold above 0.95 – SocGen

others

Languishes near monthly low, focus remains on Fed decision – Crypto News

Published

2 years ago

on

Share:

  • EUR/USD comes under some renewed selling pressure amid a modest pickup in the USD demand.
  • The technical setup favours bearish traders and supports prospects for a further depreciating move.
  • A sustained strength beyond the 1.0900 mark is needed to negate the near-term negative outlook.

The EUR/USD pair meets with a fresh supply during the Asian session on Wednesday and drops to the 1.0815 region in the last hour, well within the striking distance of its lowest level since December 13 touched earlier this week.

The JOLTS report published on Tuesday showed that US job openings unexpectedly increased to 9.02 million in December and suggested that the labor market is too strong for the Federal Reserve (Fed) to start cutting interest rates in the first quarter. This, along with geopolitical risks stemming from conflicts in the Middle East and China’s economic woes, assists the safe-haven US Dollar (USD) to stand tall near its monthly peak and exerts some pressure on the EUR/USD pair.

That said, the recent decline in the US Treasury bond yields might hold back the USD bulls from placing aggressive bets ahead of the highly-anticipated FOMC monetary policy decision, scheduled to be announced later today. Furthermore, the uncertainty over the timing of when the European Central Bank (ECB) will start cutting interest rates could act as a tailwind for the shared currency. This, in turn, might contribute to limiting any further depreciating move for the EUR/USD pair.

From a technical perspective, spot prices, for now, seem to have found acceptance below the 200-day Simple Moving Average (SMA). Moreover, oscillators on the daily chart have been gaining negative traction and are still far from being in the oversold territory. This, in turn, suggests that the path of least resistance for the EUR/USD pair is to the downside. That said, bearish traders might still wait for a sustained break and acceptance below the 1.0800 mark before placing fresh bets.

The subsequent downfall has the potential to drag spot prices to the December monthly swing low, around the 1.0725-1.0720 area, en route to the 1.0700 mark. Some follow-through selling will expose the next relevant support near the 1.0660 region before the EUR/USD pair eventually drops to the 1.0620-1.0615 zone en route to the 1.0600 round figure.

On the flip side, the 1.0845-1.0850 region, or the 200-day SMA, could act as an immediate hurdle ahead of the 1.0880 area and the 1.0900 mark. This is closely followed by a short-term trading range support breakpoint now turned resistance, around the 1.0920 region, which if cleared decisively might trigger a short-covering rally. The EUR/USD pair might then make a fresh attempt to conquer the 1.1000 psychological mark.

EUR/USD daily chart

Technical levels to watch

 

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending