Euro Slips Amid US Dollar Rebound
As the US Dollar (USD) experiences a broad rebound, the Euro (EUR) has slipped to 1.1109 levels, according to OCBC FX strategists Frances Cheung and Christopher Wong.
Key Points to Consider:
- ECB’s Comments: Lagarde’s remarks on the recovery and inflation
- Technical Analysis: Resistance and support levels
Resistance at 1.12 Double-Top
Recent statements from the European Central Bank (ECB) President, Christine Lagarde, have highlighted the challenges faced by the economy. Lagarde mentioned that certain survey indicators are showing a subdued level, indicating potential headwinds to the recovery. However, she expressed confidence that inflation will return to target levels in due time. These comments are crucial as they will be taken into consideration during the ECB’s upcoming monetary policy meeting in October.
Technical Analysis:
- Daily Momentum: Lack of clear bias
- RSI: Trending lower
- Risks: Skewed towards the downside
- Patterns: Double-top formation, often signaling a bearish reversal
- Support Levels: 1.11 (21 DMA), 1.1030, 1.1060 (50 DMA, 23.6% fibo retracement of 2024 low to high)
- Resistance Level: 1.12 (double-top)
Analysis:
Overall, the current market conditions reflect a cautious stance towards the Euro, driven in part by the strengthening US Dollar. Lagarde’s comments on the economic recovery and inflation expectations have added to the uncertainty surrounding the Euro’s future performance. From a technical perspective, the presence of a double-top pattern and the downward trend in RSI indicate potential bearish signals. Investors and traders should closely monitor the support and resistance levels mentioned above to gauge the Euro’s next moves.