EUR/USD Analysis Summary Today
- Overall Trend: Bearish
- Support Levels for EUR/USD Today: 1.1570 – 1.1500 – 1.1430.
- Resistance Levels for EUR/USD Today: 1.1660 – 1.1740 – 1.1810.
EUR/USD Trading Signals:
- Buy the EURUSD from the support level of 1.1520, target 1.1800, and stop 1.1460.
- Sell the EURUSD from the resistance level of 1.1730, target 1.1600, and stop 1.1800.
Technical Analysis of EUR/USD Today:
As anticipated, the bearish bias for EUR/USD has strengthened, moving towards and below the 1.1600 support level. During yesterday’s trading session, the most famous currency pair in the Forex market saw losses extend to the 1.1576 support level, near its lowest point in a week, before stabilizing around the 1.1610 level at the time of writing this analysis. Overall, the EUR/USD bias may remain bearish as traders now look to US inflation data for clues on whether the Federal Reserve will implement another interest rate cut next week.
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The consolidation of the 14-day Relative Strength Index (RSI) around a reading of 43, below the neutral line, confirms the bearish shift for the EUR/USD pair across reliable trading platforms. Despite the losses, the pair still has more room for stronger declines before reaching oversold territory. This could happen if the bears succeed in pushing towards the support levels of 1.1540, 1.1470, and 1.1400, respectively.
As we mentioned before, the EUR/USD pair's upward trend, based on the daily chart, will continue to be contingent on a move towards the 1.1800 resistance level again.
Trading Tips:
Wait for the reaction to the US inflation figures to anticipate the most appropriate EUR/USD trades, whether to buy or sell.
EUR/USD Forecasts for the Coming Days
According to Forex market trading, the EUR/USD exchange rate failed to breach the 1.1700 area at the start of this week's trading and quickly inclined to move towards and below the 1.1600 support as the US Dollar achieved net gains in currency markets. Although the 10-year US Treasury yield remained below 4.00%, the US Dollar still managed to post net gains while the Yen recorded sharp losses.
Regarding the future of currency prices, UoB Bank does not expect a breakout; while a calmer fundamental tone suggests a potential drop in the Euro price today, any decline is likely to be part of a lower range between 1.1625 and 1.1660. However, according to ING Bank, there is room for further short-term decline; "EUR/USD remains almost entirely driven by US credit/equity sentiment. Accordingly, further stability could lead to EUR/USD trading reaching the 1.160 support. Levels below that will be difficult to justify unless Friday's US CPI comes in higher than expected."
Overall, US interest rate expectations will be a key market influencer.
At this stage, traders are pricing in a near-100% chance of a US rate cut at next week’s meeting, and the Federal Reserve has not expressed any objection. In this regard, Rabobank commented, "The FOMC remains likely to make another cut in October, even if the committee's vision is limited. In the absence of convincing evidence to go beyond October or to make a larger cut in October, the FOMC is operating automatically."
Generally, financial markets also estimate a probability exceeding 95% for an additional 25 basis point US interest rate cut in December. Before that, with the government shutdown, US markets continue to operate with a scarcity of data, which increases the risk of misjudging subsequent meetings.
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