OctaFX | OctaFX Forex Broker
Open trading account

EUR/USD: oversold, but not overdone - FXStreet

FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that falling commodities prices and plummeting stocks sent investors in a run towards safety, making of the American dollar the overall winner of the day.

Key Quotes:

"The EUR/USD pair fell to its lowest in 3-weeks, reaching 1.1112 in the American afternoon, from where it barely bounced before the closing bell. Uncertainty has reached new levels these days, as after leaving rates on hold last week, FED's officers are doing their best to anticipate a hike as soon as next month, with bold statements every time they get a chance. There were no relevant macroeconomic releases in Europe or the US, or at least not those that can affect prices. In the US, the Richmond Fed Manufacturing Index for September resulted at -5 against previous 0, worse than the 4 expected. In Europe, the EU flash consumer confidence in September, fell slightly below expected, posting -7.1 against previous month reading of -6.9.

The EUR/USD pair consolidated all through the Asian session, meeting selling interest on its attempts to advance beyond the 1.1200 price zone. But with the European opening, the dollar began rallying all through the board, led by risk sentiment and the EUR/USD decline extended during the American afternoon, with the pair ending the day a few pips above the mentioned low, in the 1.1120 region.

The technical picture favors additional short term declines, as the 1 hour chart shows that the 100 SMA is crossing below the 200 SMA, well above the current level, whilst the 20 SMA contains the upside around 1.1160 now. In the same chart, the technical indicators are consolidating in extreme oversold readings, with no signs of changing bias any time soon.

In the 4 hours chart, the Momentum indicator has partially lost its bearish tone, but the RSI indicator maintains its downward slope around 28, supporting additional declines for the upcoming sessions, particularly if risk aversion continues dominating the financial world."

Argentina Trade Balance (MoM) fell from previous $204M to $51M in August

Argentina Trade Balance (MoM) fell from previous $204M to $51M in August
Read more Previous

USD/CHF looking for parity?

USD/CHF is posting modest gains on Tuesday, on a day were equities dropped sharply in Europe and in Wall Street. The US dollar and the yen were the best performers while the Swiss franc outperform among European currencies.
Read more Next
Start livechat