EUR/USD ANALYSIS
- Israel/Palestine tensions keep dollar bid.
- Fed speak to come.
- EUR/USD attempting reversal.
EURO FUNDAMENTAL BACKDROP
The euro has slipped once again after a decent upside run last week due to a risk off sentiment in global financial markets due to the war in Israel. The greenback garnered favor as its safe haven appeal drew in investors. Weak Chinese spending during their Golden Week last week exacerbated growth concerns in the region supplementing EUR downside. Earlier this morning (see economic calendar below), German industrial production contracted more than expected but marginally improved relative to the July print. Overall, the European economic outlook remains bleak and will continue to weigh negatively on the local currency.
Later today, Fed speakers will come into focus after the Non-Farm Payroll (NFP) print last Friday and may elude to the upcoming US CPI report later this week.
ECONOMIC CALENDAR (GMT+02:00)
Source: Refinitiv
The European Central Bank’s (ECB)’s Knot spoke earlier today stating that he was comfortable with rates at current levels which falls in line with projections to keep rates on hold (see table below) for the October meeting.
EUROPEAN CENTRAL BANK INTEREST RATE PROBABILITIES
Source: Refinitiv
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TECHNICAL ANALYSIS
EUR/USD DAILY CHART
Chart prepared by Warren Venketas, IG
The daily EUR/USD chart above shows the recent EUR selloff but continues to hold above the 1.0500 psychological handle. The pair has managed to move out of the oversold zone via the Relative Strength Index (RSI). The rest of the trading day will see US market participants reacting to the recent Middle Eastern conflict while preparing
Resistance levels:
- 1.0635
- 1.0600
Support levels:
- 1.0500
- 1.0443
IG CLIENT SENTIMENT DATA: MIXED
IGCS shows retail traders are currently neither NET LONG on EUR/USD, with 67% of traders currently holding long positions (as of this writing).
Download the latest sentiment guide (below) to see how daily and weekly positional changes affect EUR/USD sentiment and outlook.
Introduction to Technical Analysis
Market Sentiment
Recommended by Warren Venketas
Contact and followWarrenon Twitter:@WVenketas
