Daily market review by HY Markets

Commercial Content Analysts
700

EUR/USD
The EUR/USD pair managed to advance modestly this Tuesday, surging up to 1.1122 during the American session, before settling around the 1.1100 figure. There were minor macroeconomic releases both shores of the Atlantic, with Germany’s Trade Balance for June resulting at €21.7B, missing expectations of €22.1B. The report also showed that exports increased by 0.3% against the 1.0% expected, while imports surged to 1.0%, compared to the previous month. In the US, the Nonfarm business sector labor productivity decreased at a 0.5% annual rate during the second quarter of 2016, according to preliminary estimates. The unit labor cost, however, rose beyond expected in the same period, up to 2.0% from the 1.8% forecast. Still, previous reading was downwardly revised to 0.2% from 4.5%, pushing the greenback lower in the last half of the day. Despite reaching a fresh weekly high, the EUR/USD pair remains confined to a tight range ever since the week started, and far from recovering its Nonfarm Payroll losses. The intraday advance stalled a couple of pips below the 38.2% retracement of its last two weeks’ rally, and unless the price extends well above it, the risk will remain towards the downside. In the 4 hours chart, the price is a handful of pips above a bearish 20 SMA, while the Momentum indicator heads higher within positive territory, but the RSI already turned lower from around its midline, indicating limited buying interest. The immediate support is the 50% retracement of the mentioned rally at 1.1095, but it will take an extension below 1.1045 to see the pair accelerating its decline during the upcoming sessions, towards the critical 1.1000 figure.

Support levels: 1.1095 1.1045 1.1000

Resistance levels: 1.1125 1.1160 1.1200

701

EUR/USD
Dollar’s weakness was the main theme across the forex board this Wednesday, exacerbated by thin trading conditions. Having been unable to rally over the firsts two days of the week, bulls finally gave up, leading to a sell-off of the American currency. US treasury yields dropped, down to 1.51% from previous 1.54%, adding to the bearish case of the greenback. The macroeconomic calendar was empty in Europe, with no relevant news releases, while in the US, the number of job openings was little changed, up to 5.62 million on the last business day of June, according to the U.S. Bureau of Labor Statistics.

The EUR/USD pair surged up to 1.1189, a major resistance level, given that it contained rallies for over a month after the Brexit, spending all of the American session consolidating below it, but above 1.1160, the immediate short term support. Nevertheless, a slightly positive tone persists ahead of the Asian opening, as in the 4 hours chart, the price is holding well above its moving averages, whilst the technical indicators consolidate near overbought territory. The price is hovering around the 23.6% retracement of its latest weekly bullish run, with the 38.2% retracement of the same rally at 1.1125, the level to break to deny an upward continuation for this Thursday.

Support levels: 1.1160 1.1125 1.1080

Resistance levels: 1.1190 1.1235 1.1280

702

EUR/USD

Quite a busy macroeconomic calendar last Friday, resulted in majors seesawing within wide ranges, with the dollar ending the day mixed across the board. In the EU, preliminary GDP readings showed that, while Germany keeps growing at a slow, but steady pace, the whole region is still struggling. German GDP for the second quarter came in at 0.4%, up by 3.1% compared to a year before. In Europe, however, Q2 GDP printed 0.3%, matching expectations and with the previous quarter revised down to 0.3%. Industrial production in the EU grew by 0.6% in June, beating previous -1.2%, but down year-on-year to 0.4%.

Still, the EUR/USD pair managed to advance up to 1.1221 ahead of Wall Street’s opening, on dismal US data. US retail sales for July came in flat on the month versus expectations of a 0.4% monthly gain, while the Producer Price Index for final demand decreased 0.4% in the same month. On an unadjusted basis, the final demand index moved down 0.2% for the 12 months ended in July. Disappointing retail sales and low PPI suggest the FED will be in no rush to raise rates. Adding to the dollar’s bearish case was the Michigan University index of consumer sentiment, at 90.4 for August against expectations of 91.5.

The dollar shrug off negative data and recovered most of the ground lost against the common currency, with the EUR/USD pair closing the week at 1.1161 and retaining its underlying negative bias, as in the daily chart, the pair retreated sharply once again from its 100 DMA. In the same chart, the Momentum indicator has turned lower within positive territory, whilst the RSI indicator continues lacking clear directional strength around neutral territory. The 20 DMA heads higher around 1.1090, converging with the 50% retracement of the latest bullish run and being the level to break to confirm additional slides. In the 4 hours chart, a bullish 20 SMA contained the downside during the past sessions, but is now a handful of pips below the current level, while the technical indicators head modestly lower around their mid-lines, increasing the risk of a downward extension for this Monday.

Support levels: 1.1125 1.1090 1.1045

Resistance levels: 1.1200 1.1235 1.1280

703

EUR/USD

The EUR/USD pair ends Thursday at its highest level since the Brexit slump, back on June 24th, as dollar’s sell-off resumed. Despite US FOMC Minutes left doors open for a rate hike, the mixed stance among policy makers suggests the Central Bank will pass from making a decision in September, and that they are in no rush to pull the trigger. The pair traded as high as 1.1356, paring gains due to tepid European inflation, as in the region, the Consumer Price Index plunged by 0.6% in July, below the already pessimistic 0.5% decline expected. The annual rate was of 0.2% in the same month, up from 0.1% in June.

In the US, weekly unemployment claims came in at 262K for the week ending August 12th, better than the 265K expected, while the 4-week average came in at 265,250, an increase of 2,500 from the previous week’s unrevised average of 262,750. Also, the Philadelphia FED manufacturing survey resulted at 2.0, as expected. Beyond German PPI, there are no major reports scheduled for this Friday, which means that the greenback has little chances of recovering ground.

From a technical point of view, the pair is poised to extend its advance on dollar’s weakness, although the rally can be limited by the lack of EUR´s demand. In the 4 hours chart, the RSI indicator heads north around 79, while the Momentum indicator diverges from price action, heading lower as price reaches fresh highs. The 20 SMA in the mentioned time frame, heads sharply higher below the current level, supporting a continued advance towards the 1.1460 price zone, a major long term static resistance.

Support levels: 1.1300 1.1265 1.1230

Resistance levels: 1.1360 1.1400 1.1460

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704

EUR/USD

After opening the week with a firm tone, the American dollar closes this Monday marginally lower across the board. The greenback’s gained pace on comments from FED´s Vice Chair Fisher, who stated that the Central Bank is “close to meeting its targets” of full employment and price stability, putting back on the table the possibility of a September rate hike. Also, a weakening yen, due to Kuroda’s comments over cutting rates further into negative territory, helped the USD. The market, however, reversed course with London’s opening, with no apparent catalyst behind, as the macroeconomic calendar has been empty during the first half of the day.

As for the US, the country released its Chicago FED National activity index, modestly higher in July, up to 0.27 from previous 0.05. Things will be more interesting this Tuesday, with the release of the eurozone flash PMIs for August and housing and manufacturing data coming from the US.

The EUR/USD pair trades near its daily high of 1.1330 ahead of the Asian opening, holding on to its recent gains and generally bullish, despite the lack of action seen this Monday has left technical readings within neutral levels. Still, in the 4 hours chart, the price is a couple of pips above a bullish 20 SMA and far above the 100 and 200 SMAs, whilst the technical indicators hover around their midlines, showing no upward strength at the time being. Still, the pair can extend its rally up to the 1.1360 region, last week highs, with a break above it supporting a continued advance up to 1.1460, a major static resistance level.

Support levels: 1.1265 1.1230 1.1190

Resistance levels: 11320 1.1360 1.1400

See more analysis at EUR/USD

After opening the week with a firm tone, the American dollar closes this Monday marginally lower across the board. The greenback’s gained pace on comments from FED´s Vice Chair Fisher, who stated that the Central Bank is “close to meeting its targets” of full employment and price stability, putting back on the table the possibility of a September rate hike. Also, a weakening yen, due to Kuroda’s comments over cutting rates further into negative territory, helped the USD. The market, however, reversed course with London’s opening, with no apparent catalyst behind, as the macroeconomic calendar has been empty during the first half of the day.

As for the US, the country released its Chicago FED National activity index, modestly higher in July, up to 0.27 from previous 0.05. Things will be more interesting this Tuesday, with the release of the eurozone flash PMIs for August and housing and manufacturing data coming from the US.

The EUR/USD pair trades near its daily high of 1.1330 ahead of the Asian opening, holding on to its recent gains and generally bullish, despite the lack of action seen this Monday has left technical readings within neutral levels. Still, in the 4 hours chart, the price is a couple of pips above a bullish 20 SMA and far above the 100 and 200 SMAs, whilst the technical indicators hover around their midlines, showing no upward strength at the time being. Still, the pair can extend its rally up to the 1.1360 region, last week highs, with a break above it supporting a continued advance up to 1.1460, a major static resistance level.

Support levels: 1.1265 1.1230 1.1190

Resistance levels: 11320 1.1360 1.1400

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705

EUR/USD
The American dollar lost ground against most of its major rivals during the first half of the day, with the EUR/USD pair extending up to 1.1355 in the London session, helped by positive data coming from the Old Continent. The flash Markit PMIs showed that Germany’s private sector continued expanded in August, with the manufacturing figure up to 53.6, above expected, but the services sector expanding at a slower pace, resulting at 53.3 from previous 54.4. For the euro area, the economy grew at a steady pace in the same month, with the Markit Composite PMI up to a seven-month high of 53.3. Later on the day, however, data showed that the EU consumer confidence decreased for a third month in-a-row, plunging to -8.5.
In the US, New Home Sales unexpectedly rose in July to the highest level in almost nine years, with sales increasing 12.4% to a 654,000 annualized pace. The FX market, however, was unimpressed with the news, as the flash Manufacturing PMI for August came in at 52.1, missing expectations of 52.7 and below July’s 52.9.
The EUR/USD pair retreated from the mentioned high during the US afternoon to settle around 1.1320, flat for a second consecutive day. Investors are waiting for the US Jackson Hole Symposium, where FED’s head, Janet Yellen, may offer some fresh clues over a timing of the next rate hike in the country. In the meantime, the 4 hours chart shows that the price is stuck around a horizontal 20 SMA, while the technical indicators lack clear directional strength around their mid-lines, failing to anticipate what’s next for the pair. Still, and as long as the price holds above 1.1300, the upside is favored, with a break above 1.1365, last week high, required to confirm an extension towards 1.1400 and beyond.
Support levels: 1.1320 1.1285 1.1240
Resistance levels: 1.1365 1.1400 1.1460

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706

GBP/USD

The GBP/USD pair broke below the 1.3100 level and fell down to 1.3059, its lowest in a week, as dollar’s demand persisted this Monday. The pair recovered some ground in the US session, but held below the mentioned 1.3100 figure by the end of the day around it. There were no fundamental news in the UK, as local banks remained close in observance of the Summer Bank Holiday, and the kingdom will only release its Money Supply figures on Tuesday, hardly a market mover. From a technical point of view, the pair has corrected the 50% of its latest advance, measured between 1.2865 and 1.3278, before bouncing, but the risk remains towards the downside, given that in the 1 hour chart, the price is being capped by a modestly bearish 20 SMA, while indicators aim higher, but within negative territory. In the 4 hours chart, the 20 SMA has turned strongly lower far above the current level, around 1.3160, while indicators have posted modest recoveries within bearish territory, still far below their mid-lines. The 38.2% retracement of the mentioned rally comes at 1.31230, now the immediate resistance and the level to break to see the pair recovering further.

Support levels: 1.3070 1.3025 1.2985

Resistance levels: 1.3120 1.3160 1.3200
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707

EUR/USD

Investors continued favoring the greenback this Tuesday, with the American currency extending its rally towards its monthly highs against most of its major rivals. Save-havens CHF and JPY suffered the most, whilst the Pound was the best performer against the USD. The EUR/USD pair fell down to 1.1131, its lowest in nearly three weeks, undermined by dismal European data. According to official releases, German inflation is expected to have risen by 0.4% in August 2016 and compared to a year before, while monthly basis, is expected to remain unchanged from July at 0.1%. Also, the EU Economic Sentiment indicator for August fell to 103.5 from previous 104.5, probably as a consequence of Brexit. In the US, however, August Consumer Confidence surged to 101.1, the highest is almost a year, from a downwardly revised reading of 96.7 in July.

The EUR/USD pair settled near the mentioned low, consolidating for most of the US afternoon in a limited range, as the market keeps waiting for some additional clues over a possible US rate hike. The country will release its Nonfarm Payroll report this Friday, which may fuel dollar’s advance particularly if wages present a more solid advance. The 4 hours chart shows that technical indicators have lost bearish momentum around oversold readings, whilst the price is currently stuck around its 200 SMA, and below the 20 and 100 SMAs, all of which maintains the risk towards the downside. The immediate support now is 1.1120, a major static level, with a break below it opening doors for further slides down to the 1.0950 region, August low.

Support levels: 1.1120 1.1075 1.1040

Resistance levels: 1.1160 1.1200 1.1245

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708

EUR/USD

The EUR/USD pair edged modestly lower this Wednesday, undermined by poor industrial output figures coming from Germany. The largest EU economy has been showing signs of economic weakness at the beginning of the third quarter, and this latest report confirms the slowdown in the industrial sector, as output during July fell by a seasonally adjusted 1.5% during July, when compared to the previous month. Majors, however, remain within their recent highs against the greenback, on diminishing hopes of a US FED September rate hike.

Early Thursday the ECB is having an economic policy meeting, although the European Central Bank is expected to remain on hold. An increase in the amount of bond-buying seems unlikely, given that falling yields in the region are shrinking the range of eligible assets. The most the ECB can do is announce an extension of the QE program beyond the March 2017 current limit, but seems unlikely that could be enough to fuel local growth and inflation. Generally speaking, Draghi is expected to offer a dovish, cautious speech that may result in some temporal weakness of the common currency.

The pair retains a positive tone according to intraday readings, as in the 4 hours chart, the price is moving around a horizontal 100 SMA, but above a now bullish 20 SMA. In the same time frame, technical indicators have corrected overbought conditions, but settled well above their mid-lines, as investors entered wait-and-see mode. The same chart shows that the price extended up to 1.1271 during the past American session, retreating from the 61.8% retracement of its latest daily decline, and the level to surpass to see further gains this Thursday. Should the market prefer the greenback, the key support is now former intraday highs around 1.1210, as a move below it would result in a return to the 1.1160 region.

Support levels: 1.1210 1. 1.1160 1.1120

Resistance levels: 1.1275 1.1310 1.1365

709

EUR/USD

The EUR/USD pair saw little action all through this Monday, confined to a tight range within 1.1210 and 1.1270, unable to attract investors amid a scarce macroeconomic calendar. Stocks plunged in Asia and Europe, tracking Wall Street’s Friday losses, and maintaining risk-averse trading as the main theme over the first half of the day. The greenback also benefited from FED’s jawboning, as Atlanta president, Dennis Lockhart, called for a “serious discussion” over rates during the upcoming September meeting. Also, a monthly survey from the New York FED showed that inflation expectations jumped to 2.8 % in August, the highest reading this year, from 2.5% in July.

A recovery in American indexes interrupted USD gains after the US opening, while mid US session, FED’s governor Lael Brainard said that the US Central Bank must guard against the low-growth, low-inflation environment that bedevils Europe and Japan, adding that the case for raising rates is “not compelling.” Her dovish words pushed the dollar lower across the board, with the EUR/USD pair advancing up to 1.1267, its daily high.

Closing the day marginally higher, the pair continues lacking definitions from a technical point of view, but the fact that is holding above the 1.1200 mark is keeping bulls interested. The 4 hour chart shows that the price is trapped within its moving averages with no directional strength, whilst technical indicators have turned higher within bearish territory, but remain below their mid-lines, suggesting a limited upward potential at the time being. A daily descendant trend line coming from this year high of 1.1615, stands today around 1.1290, being the level to surpass to see a more sustainable recovery during the upcoming sessions.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1290 1.1335 1.1370

710

The EUR/USD pair treaded water around 1.1230 for a second consecutive day, even through the American dollar resumed its Friday’s advance and edged broadly higher against most of its major rivals. Mixed messages coming from FED’s officers, as all of a sudden jawboning has turned dovish, is clearly reflecting what the market knew with the previous meeting’s statement that is, that sentiment over a rate hike is split within policymakers. This is reducing dramatically chances of a rate hike as soon as this September, but the greenback is poised to extend its advance anyway.

Dismal data coming from Europe failed to attract sellers, although will clearly weigh during the upcoming sessions if the dollar remains strong. German inflation persists at low levels, as August CPI printed 0.4% YoY, matching July’s reading and market’s expectations, while in the month, it remain flat, coming in at 0.0%. The ZEW sentiment survey, showed that business sentiment in the country has remained unchanged at 0.5, while for the whole euro area came in at 5.4, both below market’s expectations. In the US, there was only a minor indicator released, the NFIB optimism index for August that resulted at 94.4 against previous 94.6.

The EUR/USD pair shed some ground at the end of the day, but holds above the 1.1200 level, and technical bias is still neutral, although the bearish potential is slowly increasing as in the 4 hours chart, the price has been unable to recover beyond a bearish 20 SMA, although in the mentioned chart, the technical indicators diverge from each other around their mid-lines, indicating to clear directional strength. The market is all about the greenback these days, and further dollar gains can push the pair below the 1.1200 mark, opening doors for a retest of last week low in the 1.1120 region. To the upside, a daily descendant trend line coming from 1.1615 is the level to surpass to deny a bearish move and see the price retesting this September high at 1.1366.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1290 1.1335 1.1370

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711

EUR/USD

The American dollar edged marginally lower in the US afternoon, as local share markets traded in a moderated fashion, with Wall Street hovering around its daily opening for most of the day. The market remains in wait-and-see mode ahead of the upcoming economic policy decisions from some major Central Banks, starting this Thursday with the BOE, and ending next week with the FED and the BOJ. There were some minor releases in Europe, including August CPI for Italy and French, which remained steady at low levels, in line with the deflationary levels seen in the region. The EU as a whole, also released its Industrial Production data for July, which fell by 1.1%, missing expectations of a 0.9% decline, and leaving the year-on-year reading at -0.5%. In the US, with the MBA mortgage approvals were up to 4.2% from previous 0.9%, whilst the August export price index came in at -2.4%, in line with expectations, but the import price index fell by 0.02%.

The EUR/USD pair picked up momentum and climbed to 1.1273, surpassing its previous weekly high by a couple of pips before retreating to the current 1.1250 region. There has been no major progress from a technical point of view, given that the price remains stuck within Friday’s range, and in the 4 hours chart, the price is now above its moving averages that anyway remain all together in a tight 20 pips range, a clear indication of the absence of directional strength. In the same chart, technical indicators head higher above their mid-lines, but the movement has been too shallow to be enough to confirm the rally will extend during the upcoming hours. A daily descendant trend line coming from this year high at 1.1615, stands this Thursday around 1.1300, the level to break to see the pair gaining some additional ground towards 1.1366, August monthly high.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1300 1.1335 1.1370

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712

EUR/USD

The American dollar closed the week with a strong tone against most of its major rivals, underpinned by better-than-expected US inflation figures released on Friday. August CPI rose by 0.2% after being unchanged in the previous month, while the core monthly figure rose by 0.3%, compared to July. This week, the FOMC and the BOJ will have their economic policy meetings, and while investors expect the US Federal Reserve to leave rates unchanged, the pickup in inflation supported the case for a hike later this year. US Consumer confidence, according to the University of Michigan’s preliminary index, also released in the last trading day of the week, resulted unchanged at 89.8, slightly below market’s expectations.

After trading in a tight range of barely 80 pips, for most of the week, the EUR/USD pair finally broke lower, ending the week at 1.1153, not far from the three-week low posted on August 31st at 1.1122, a strong static support. The common currency remains resilient to dollar’s strength, in spite of the latest ECB’s decision to leave its economic policy unchanged, making of a bearish case a limited one at this point. The daily chart for the pair shows that it’s trading above a long term ascendant trend line, coming from 1.0505, November 2015 low, around 1.1050/60 for this upcoming days. In the same chart, the price is below its moving averages, which have been long missing directional strength, whilst technical indicators have turned lower within neutral territory, indicating that the risk is towards the downside. In the shorter term, and according to the 4 hours chart, the bearish potential is even clearer, as the Momentum indicator heads south well below its mid-line, while the RSI indicator consolidates around 28, and that the pair posted a long volume candle after breaking below its moving averages.

Support levels: 1.1120 1.1080 1.1040

Resistance levels: 1.1160 1.1200 1.1245

713

EUR/USD

The American dollar shed ground this Monday, as commodities and equities traded with a firmer tone during the first half of the day. Trading volume, however, was low amid a Japanese holiday, situation that extended all through the day due to a scarce macroeconomic calendar. With little news around and the FED and BOJ’s meetings around the corner, investors held in cautious mode. A minor economic release in the EU showed that the current account surplus in the area declined from €29.5 billion in June to €21 billion in July, putting at risk any growth’s perspective in the region.

The EUR/USD pair rose up to 1.1197, but pared gains after the release of US builders´ confidence data that surprised to the upside, with the NAB housing market index up to 65 in September, the highest in almost a year. The pair spent the rest of the American session consolidating a handful of pips below the mentioned high, maintaining a weak stance from a technical perspective and in the short term, as in the 4 hours chart, the price continues developing well below its moving averages, whilst technical indicators head modestly lower within negative territory, but off their early lows set in oversold levels. German PPI and US Housing starts will gather investors attention this Tuesday, although major breakouts will wait for Wednesday, with the release of the latest FOMC economic policy decision.

Support levels: 1.1160 1.1120 1.1080

Resistance levels: 1.1210 1.1245 1.1290

714

EUR/USD

The so long awaited BOJ and FED’s economic policies announcements ended up being a big disappointment for dollar bulls, as both Central Banks decided to leave their policies basically unchanged. The BOJ left rates at -0.1%, a move meant to protect banks, but decided to introduce an interest rate target for 10-year government bonds, in a way to control the yield curve. The US Federal Reserve, also left its key rates unchanged, but this time, there were three dissenters, up from one last time, somehow indicating that a rate hike is around the corner. In the press conference, Yellen reiterated that the case for a rate hike strengthened, also indicating that a rate hike is not far away. As for the FED’s ´dotplot´, it shows that policy makers are still expecting one more rate hike left for this 2016, and just two for 2017. Officers, however, cut their median growth projection for 2016 to 1.8% from 2%, mirroring the drop in the longer-run forecast, based on median estimates. Inflation is projected at 1.3% in the fourth quarter, down from a forecast of 1.4% in June.

The dollar initially plummeted across the board, with the EUR/USD pair reaching 1.1196 before retreating modestly ahead of the press conference. Yellen’s words, who said that they decided to leave rates unchanged due to labor market slack and low inflation, adding also that the economy has room to run, cast doubts over the pace of rate hikes, hurting any upward potential of the greenback. As for the technical picture, the EUR/USD pair did little progress, maintaining a neutral-to-bearish technical stance in its 4 hours chart, as indicators turned lower within neutral territory, while the price has been unable to advance above the 100 and 200 SMAs. Given the limited upward scope of the greenback, however, the pair may advance this Thursday, with a steady advance beyond 1.1200 required to confirm so.

Support levels: 1.1160 1.1120 1.1080

Resistance levels: 1.1200 1.1245 1.1280

See more analysis at https://www.hycm.com/en/markets/daily-outlook

715

HY Markets
EUR/USD
The greenback extended its decline this Thursday, still pressured by FOMC’s decision to keep rates unchanged during their last meeting. Even through a December rate hike is a possibility, investors believe that policymakers are not yet ready to abandon the current accommodative stance and fully compromise with the tightening path. There were no macroeconomic releases in the EU, while in the US, data came in mixed, with weekly unemployment claims down to 252K for the week ending September 16, from the previous week’s unrevised level of 260K. Existing-home sales eased up in August for the second consecutive month, declining by 0.9% to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July.
The EUR/USD pair advanced up to 1.1257, a fresh weekly high, before pulling back during the US afternoon, nearing the 1.1200 ahead of Wall Street’s close. There was no catalyst behind this last intraday decline, except maybe the lack of follow-through forcing speculators to take some profits out of the table. The pair maintains a neutral stance, having stalled its advance below last week’s high of 1.1283, still the level to surpass to confirm more sustainable EUR gains. The 4 hours chart suggests that such scenario is becoming unlikely, as the technical indicators in the mentioned chart have turned sharply lower within positive territory from near overbought readings, whilst the price is now back around its 100 and 200 horizontal moving averages. While it is too early to call for a slide according to technical readings, further slides below the 1.1200 level will put the pair at risk of a downward extension towards the base of this week’s range at 1.1120.
Support levels: 1.1200 1.1160 1.1120
Resistance levels: 1.1250 1.1280 1.1335
See more analysis at https://www.hycm.com/en/markets/daily-outlook

716

EUR/USD
The EUR/USD closed Friday at 1.1226, range bound for a fourth consecutive week. Since late August, the pair has been trading within a well-limited 200 pips’ range, with uncertainty ahead of the US Federal Reserve decision sending investors to the side-lines. Still, the Central Bank failed to set the tone for the pair, offering a mixed tone, as while it left doors open for a December hike, it also showed no rush in tightening rates. Things in Europe were not helping the bullish case for the common currency, as September preliminary Markit PMIs showed that the services sector activity fell to a 21-month low. Manufacturing on the other hand, improved, both for the EU and Germany, but that was not enough to outpace services’ reading, resulting in the EU Markit composite PMI falling to a 20 months low of 52.6 and the German reading falling to 52.7, the lowest in over a year.
For this upcoming week, the US will once again take center stage, with the release of PCE inflation, Durable Goods Orders, the final revision for the Q2 GDP figure, and at least nine FOMC members scheduled to speak.
The technical picture is neutral, as long as the price holds above 1.1120, but below 1.1366, August high. The pair continues developing within two large trend lines, with the longest being the ascendant one, coming from November 2015 low of 1.0505, and around 1.1080/90 for the upcoming days. As for the descendant trend line, it began at 1.1615, May 2016 high, and should offer some resistance if reached, currently around 1.1280. In the daily chart the price is above the moving averages, but the indicators remain all together and without directional strength, reflecting the absence of direction, while technical indicators hold within neutral territory. In the 4 hours chart, the pair presents a moderate bullish tone, as the price is above its moving averages, and technical indicators in positive territory, although losing upward strength.
Support levels: 1.1190 1.1160 1.1120
Resistance levels: 1.1250 1.1280 1.1335

See more analysis at https://www.hycm.com/en/markets/daily-outlook

717

EUR/USD
The EUR/USD pair enjoyed some short term demand, rallying up to 1.1278 on Monday, before better-than-expected US housing data gave investors to reject the advance around a major static resistance level. As usual lately the week started in slow motion, with most majors trading in quite limited intraday ranges. New Home sales in the US slipped by less than expected in August, running at a 609,000 seasonally adjusted annual rate, down by 7.6% on the month when compared to July, against expectations of a 8.6% decline. Also, helping the greenback were comments from FED’s Lacker, an usual hawk, who said that the case for a December hike is strong. In the EU, Germany released its IFO survey showing that the business climate rose sharply in September, to 109.5 from 106.2 in August, with surged in both the current assessment and the expectations components.
As for the technical picture of the EUR/USD pair, it continued trading within its latest range, stalling its recovery around a major resistance level, a daily descendant trend line coming from this year high at 1.1615. The pair also has multiple intraday highs and lows around the 1.1280 region, and as long as the price remains below it, the upward potential will remain limited. Technical readings in the 4 hours chart are starting to show some divergences, as while the price remains above a sharply bullish 20 SMA that already advanced above the 100 SMA, the Momentum indicator heads south towards its mid-line, while the RSI indicator retreats from near overbought readings. Additional declines below 1.1225 will increase the risk of a bearish continuation for this Tuesday, with 1.1160 as a probable bearish target should the dollar strengthen steadily.
Support levels: 1.1225 1.1190 1.1160
Resistance levels: 1.1280 1.1335 1.1365
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718

HY Markets
EUR/USD
Trading was choppy around the EUR/USD pair this Wednesday, as investors were waiting for speeches from both, ECB’s Draghi and FED’s Yellen. None of them, however, broke fresh ground when it comes to economic policies, leaving the pair marginally lower, down for a second consecutive day. Federal Reserve Chair Janet Yellen, spoke before the House Panel on Bank Supervision, and her speech was focused on banking supervision and regulations. When asked about rates, she just mentioned that there is “no fixed timetable for rising rates.” As for Mario Draghi, he spoke about the current developments in the euro area, in Berlin, defending the ongoing Central Bank’s policies, stating also that negative rates are not to blame for the woes of the banking sector. In the macroeconomic front, the US released its Durable Goods Orders for August, which came in flat, compared to the previous month, at 0.0%. Bad news within the report showed that shipments of capital equipment declined for a fourth straight month, which will probably result in a downward revision of Q3 GDP estimates.
From a technical point of view, the EUR/USD pair continues making little progress this week, although the upward momentum seen last week keeps fading, as the pair posted a lower low daily basis. The 4 hours chart shows that the price was unable to recover above its moving averages, although the indicators remain mostly horizontal and confined within a 30 pips range, reflecting the absence of a clear trend, while the Momentum indicator in the mentioned time frame heads south below its 100 level and the RSI indicator consolidates around 47, leaning the scale towards the downside. Renewed selling interest below 1.1190, could see the pair extending its decline down to 1.1120 during the upcoming sessions, a strong static support.
Support levels: 1.1190 1.1160 1.1120
Resistance levels: 1.1245 1.1280 1.1335
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719

EUR/USD
The American dollar closed last week firmly up against all of its major rivals, helped by a flash crash in the British Pound early Friday. Still, the greenback was supported by generally encouraging local data released at the beginning of the week, that indicate that the US economy keeps growing at a steady pace. On Friday, the long awaited employment report came in a little lower than expected, but it was not enough to deny the case of a December rate hike. In September, the US created 156K new jobs, against 172K expected, the unemployment rate ticked up from 4.9% to 5.0%, whilst average earnings figure rose less than expected, but in line with average readings, up 0.2% MoM and back to 2.6% YoY. The EUR/USD pair seesawed after the release, but ended up recovering from a twomonth low printed at the beginning of the day at 1.1104, to end the day a handful of pips below the 1.1200 level, trapped within the same range for a sixth consecutive week. The absence of directional conviction among investors has deepened after both Central Banks moved to the sidelines, and market’s attention is now on the second US presidential debate, late Sunday night, as a possible catalyst for some USD moves. Technically, the pair remains trapped between two longterm trend lines, with the longest being the ascendant one, this week around 1.1090/1.1100. In the daily chart, the price is hovering around horizontal moving averages, while indicators are within neutral territory, while in the 4 hours chart, technical indicators have recovered from oversold readings and pared gains around their midlines, while the price is above its 20 SMA, but below the 100 and 200 SMAs. Overall, the risk remains towards the downside, as long as selling interest surges in the 1.1245/1.1280 region.

See more analysis at HYCM - Multi-Regulated Forex & CFD Provider | Henyep Group

Support levels:1.1160 1.1120 1.1080

Resistance levels: 1.1245 1.1280 1.1335