EUR/USD Analysis and Charts
EUR/USD rallied this week after US inflation slowed down and continued to hold most of those gains through Thursday’s session. However, the bulls are still struggling with key resistance levels.
The single currency has risen since early October as global markets start to believe that US borrowing costs may fall next year. The latest deceleration in official US consumer-price inflation did not affect this thesis and saw the greenback weaken.
The Euro’s recent vigor may be attributed to the story of Dollar weakness, as it has come in the absence of first-tier Eurozone data. Recalling soft Purchasing Managers Index data of early September that sent EUR/USD down to three-month lows. However, the European Commission downgraded its forecasts for growth in the currency bloc due to higher borrowing costs impacting economic activity.
European Central Bank President Christine Lagarde spoke on Thursday, but there was no significant change in the market. Final Eurozone core and headline inflation figures for October are expected to be released on Friday. A change in resistance and support levels could be expected based on these figures.
EUR/USD Technical Analysis:
Euro bulls are struggling to convincingly pass the psychological 1.0850 resistance mark. The pair’s Relative Strength Index is nudging up again toward the ‘overbought’ 70.0 level, which might signal a need for a pause. The week’s close relative to these levels could be instructive for near-term direction.
The current scenario in the market is mixed, with 42% net long and 58% short, emphasizing uncertainty in the market.
Source: DailyFX (https://www.dailyfx.com)
