EUR/USD uphill struggle upward momentum as the pair approaches the key psychological level of 1.1800. The currency pair is trading almost 600 pips below this level at the moment. It stays below straddle enforcement levels, indicating a time of retrenchment as actors in the market hunker down and wait for more guides on US economic performance and comments from Federal Reserve Chair Jerome Powell.
The balance of recent economic data released from the European Union does not help clarify what might be at play in today’s complicated market dynamics. The September PMIs from the Hamburg Commercial Bank, released today, paint a mixed picture. The Composite PMI is 51.2, above the consensus of 51.1 and up from last month’s reading of 51. This data shows that growth has returned to the Eurozone. That’s not enough to propel the EUR/USD much higher.
As such, at the moment, EUR/USD is still above all of its moving averages, painting a mildly bullish picture. And the 20 Simple Moving Average (SMA) is offering intraday support near the 1.1770 mark. This support is imperative to ensuring we continue this upward trend. The two have been moving lockstep in very low volatility since the market opened, with them tight in a ~50 pip intraday range.
Market indicators reflect a cautious outlook. The Momentum indicator indicates indecision and remains just above the 100 line. This may indicate that momentum is insufficiently strong to overcome key resistance levels. The RSI is still technically in an uptrend, but has reclaimed only modest gains: down to 53. This modification implies that the most important currency pair in the world may be running out of upside momentum.
Resistance levels for EUR/USD are strongly packed at 1.1820, 1.1840, and 1.1850 respectively. On the flip side, 1.1820, 1.1855 and 1.1890 are major resistance lines. Traders are still getting a sense of what’s coming in terms of price action. They are carefully laying the groundwork in advance of big new economic indicators being announced.
It’s not just the fundamental picture that’s it EUR/USD odds The paucity of demand for USD makes the picture worse. There are bullish signals from the 100 and 200 SMAs both trending upward. Yet, these longer moving averages are considerably lower than the shorter moving averages, indicating that the euro might have difficulty sending EUR/USD clearly through the 1.1800 level without some further bullish boosts.