EUR/USD is not out of the woods yet Hello everyone, as we all know the market action discounts everything :)
_________________________________Make sure to Like and Follow if you like the idea_________________________________
The EUR/USD pair ended up closing the day in the negative territory Despite the good trading action on Monday and seems to have gone into a consolidation phase around mid-1.1500s on Tuesday.
It looks like the pair is trending in a Falling wedge pattern in a downtrend which usually indicates a reversal into a Bullish state soon but we have 0 confirmation so far. Breaking the pattern will give us the confirmation we need for a reversal.
Possible Scenarios for the market :
Scenario 1 :
The market is trading at 1.15605 at the time of this post, we are expecting a Bearish day today which will probably lead the market to the first support like located at 1.1536 where we will see a small battle between the Bulls and Bears over control which will determine the market movement for the next few days.
Scenario 2 :
The Bears seems to be in total control over the market and with a strong push we might see the pair reach the support located at 1.1496 by the end of the day. The Bulls will have a chance at that level to gain control back and push the market in hope of a breakout. The first target will be the resistance level at 1.1575 and from there they will be headed to the 1.1692 level.
Technical indicators show :
1) The market is below the 10 20 50 100 and 200 MA and EMA (Strong Bearish Signs)
2) The RSI is at 32.82 showing weakness in the market and giving a Sell signal.
3) The MACD is below the 0 line indicating that the market is in a Bearish state, With a negative crossover between the MACD line and the Signal line.
Support & Resistance points :
support Resistance
1) 1.1536 1) 1.1575
2) 1.1523 2) 1.1601
3) 1.1496 3) 1.1615
Fundamental point of view :
The common currency stays on the back foot in the first half of the week as investors can't find a reason to anticipate a reversal of direction.
Commenting on the inflation outlook on Monday, European Central Bank (ECB) chief economist Philip Lane said that they need to be "less trigger happy" and wait for data. "The medium-term inflation dynamic is too slow, not too fast," Lane added and noted that the trigger for monetary policy action is not there.
On Tuesday, October ZEW Survey - Economic Sentiment data for Germany and the eurozone will be featured in the European economic docket.
Even if these surveys point to a modest improvement in economic sentiment, the shared currency could have a tough time attracting investors, who are likely to put more weight on the policy divergence between the ECB and the Fed. Later in the day, the NFIB Business Optimism Index and JOLTS Job Openings data from the US will be looked upon for fresh impetus. However, it wouldn't be surprising to see a muted market reaction ahead of Wednesday's US inflation report and FOMC Minutes. According to FXsteet
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.
