EUR/USD Analysis: What You Need to Know
Key Points:
- US private job creation exceeded expectations in September, boosting the US Dollar.
- Geopolitical tensions in the Middle East drive investors towards safe-haven assets like the USD.
- EUR/USD pair shows bearish momentum, targeting the key support level of 1.1000.
The EUR/USD pair saw a rebound from a weekly low of 1.1045, with market participants closely monitoring US economic data releases. This week, the focus is on US employment figures, with key reports leading up to the highly anticipated Nonfarm Payrolls release on Friday.
Recent data from the US showed a significant increase in job openings, with the ADP survey reporting private sector job additions surpassing expectations in September. These positive figures have provided support to the US Dollar, driving its strength against the Euro.
On the other hand, geopolitical tensions in the Middle East have created a risk-averse environment, prompting investors to seek safety in the USD. The ongoing conflict between Israel and Lebanon has fueled market uncertainties, leading to a surge in oil prices and a preference for USD over high-yielding assets.
Technical Analysis:
Looking at the technical aspects of the EUR/USD pair:
Daily Chart:
- The pair is trading below the 20 Simple Moving Average (SMA) at around 1.1100, indicating a bearish trend.
- The 100 and 200 SMAs show weakening upward momentum, suggesting further downside potential.
- Technical indicators are bearish and below their midlines, signaling a likelihood of continued losses.
4-Hour Chart:
- A bearish 20 SMA is approaching a potential cross below the 100 and 200 SMAs, indicating a strong selling signal.
- Technical indicators are trending lower within negative levels, hinting at a possible downward move in the near term.
Support Levels: 1.1040, 1.1000, 1.0960
Resistance Levels: 1.1110, 1.1150, 1.1200
Analysis Summary:
The EUR/USD pair is currently under pressure due to strong US economic data and geopolitical uncertainties. The bearish trend in technical indicators suggests a potential further decline in the pair’s value. Investors should closely monitor key support levels at 1.1000 and 1.0960, as a break below these levels could signal a more significant downtrend. Resistance levels at 1.1110 and 1.1150 may offer hurdles for any potential upside movements.