The EUR/USD currency pair retraced some of its intraday high. It remains above the key 1.1700 ~ level as traders await key economic reports and face political drama. Against this backdrop, retail investors trading during European hours pushed EUR/USD to an intra-day high of 1.1761. That was then and it has since sunk back down to the 1.1730 area as we near the US open today.
Despite this tare recent turn-around the EUR/USD pair continues to hold small weekly gains, but as of this writing the pair is clearly in a wait-and-see stance. Once technical selling pressure at the flat 20 Simple Moving Average (SMA) are capped, market analysts note that this pair will search for direction. This SMA is located a few ticks above the current trading level. This dynamic points to a still cautious mood among traders as they absorb both the unspooling economic data and rapidly unfolding geopolitical events.
Technical analysis of the EUR/USD points to a moderately bullish 100 SMA providing strong support around the 1.1600 mark. Additionally, other vital technical metrics seem to be plateauing near their respective midlines with no definitive directional momentum. The triple convergence of the 20 and 200 SMAs above the round 1.1710 level adds its importance. It provides additional reinforcement for the currency pair.
We find resistance levels for EUR/USD at 1.1820, 1.1845, and 1.1870. Support levels are seen at 1.1760, 1.1795, and 1.1830. Along with the $40K level, both upside levels will be heavily watched by traders and act as a potential breakout point in either direction.
Recent economic data from Germany and a higher-than-expected Harmonized Index of Consumer Prices already have markets betting on faster growth. In September, it increased by 2.4% over last year. Such data would have a significant impact on market expectations about what the European Central Bank’s monetary policy stance is likely to be going forward.
Further across the Atlantic, the release of next month’s Job Openings and Labor Turnover Survey (JOLTS) report has everyone buzzing. Analysts are looking for a decrease in job openings, with a forecast of 7.1 million, down from July’s 7.181 million. This would raise prospects for US labor market strength and general economic optimism.
Communities of color are experiencing the brunt of this economic crisis Analysts expect the Conference Board’s Consumer Confidence Index to fall to 96.0 That’s down from August’s reading of 97.4. These figures matter, a lot. Together, they provide real-time indicators of consumer confidence and spending trends, both of which are critical to fuelling economic growth.
Fears of a United States government default have spooked markets, influenced by ongoing speculation about a potential United States government shutdown. This unprecedented reality is further complicating financial dynamics. Political upheaval like this would likely further shake investor confidence and weigh on the EUR/USD.