EUR/USD: Analyzing the Current Market Trends
Chinese Stimulus and US Federal Reserve Speeches Impacting EUR/USD
- Chinese headlines drive market sentiment in the first half of the day.
- Federal Reserve officials’ speeches to shape the American session.
- EUR/USD facing pressure to break below the 1.0900 threshold.
The US Dollar has shown strength at the beginning of the week, impacting its performance against major currencies like the Euro. The EUR/USD pair has seen a decline towards the 1.0900 level during European trading hours, signaling bearish sentiment ahead of the American session.
China’s Economic Developments and Trade Balance Data
Over the weekend, China’s Finance Minister Lan Fo’an addressed the press, hinting at more stimulus measures without providing specific details. The country announced support for the property sector and local governments in debt, with discussions on a potential deficit increase by the central government. Additionally, China’s latest Trade Balance figures for September showed a surplus of $81.71 billion, slightly lower than expectations.
Federal Reserve Speeches and Market Focus
With no significant economic data on Monday, the focus shifts to speeches by Federal Reserve officials during US trading hours. These speeches could offer insights into the future direction of the central bank’s monetary policy.
EUR/USD Short-Term Technical Analysis
Technical analysis indicates a bearish outlook for the EUR/USD pair in the short term. The daily chart shows a pattern of lower lows and lower highs, with resistance near the 100 Simple Moving Average (SMA) at 1.0935. The 20 SMA is trending downwards, indicating selling pressure, while technical indicators suggest further downside potential without showing signs of exhaustion.
In the near term, the 4-hour chart highlights a bearish trend with the 20 SMA acting as resistance. The 100 SMA is crossing below the 200 SMA, confirming bearish momentum. Technical indicators support a downward move, particularly if the pair breaks below the immediate support level at 1.0890.
Key Levels to Watch
Support levels: 1.0890, 1.0850, 1.0810
Resistance levels: 1.0935, 1.0970, 1.1010