EURUSD: some reversals ahead
It was a shaky week for US Treasuries and the equity market. While Treasury bonds were at a sort of sell-off point, the equity market was adjusting to new sentiment and Fed`s narrative of higher-for-longer. The market was mostly focused on US jobs data which were posted during the previous week, as a potential indicator where the Fed might head on their next meeting. Non-farm payrolls for September were standing at 336K, much higher from the market estimate of 170K and also higher from revised August figures at 227K. Unemployment rate was unchanged from August level, remaining at 3.8%, although markets were expecting to see a slightly lower figure at 3.7%. Regardless of strong jobs figures, average hourly earnings were increased by 0.2% in September on a monthly basis and 4.2% on a yearly basis, which was lower from market estimates of 0.3% and 4.3% respectively. It is generally perceived positively by markets, considering the impact of higher earnings on inflation. The rest of indicators for US are showing that ISM Services PMI in September was in line with forecasted 53.6, while ISM Manufacturing PMI was modestly increased in September to 49 from 47.6 posted for the previous month. During the previous week there have not been important fundamentals for the Euro Area, in which sense, Eur currency was sort left aside, while focus of the market was on US Dollar.
The currency pair reached a new lowest level since November last year, by reaching 1.044 during the previous week. This was a point of short reversal to the upside, so the currency pair finished the week at level of 1.058. After reaching a clear oversold side, the RSI moved a bit to the higher grounds, ending the week at level of 43. The level of 50 is still not reached, showing that investors are still not ready to clearly head toward the overbought side. Moving average of 50 days continues with divergence from MA200 counterpart, and confirming the cross occurred as of the end of September.
Eurusd started a short term reversal, after reaching a clear oversold side of the market. The support line at 1.055 was shortly breached to the downside, however, the next long term support line at 1.040 has not been reached, because the currency pair swiftly returned to previous support as of the end of the week. It could be expected that markets will test the 1.055 support line at the beginning of the week ahead. In case that it is not clearly breached, it could expect that eurusd will hold upside momentum and continue toward the next resistance at $1.067. It should be considered that inflation figures for US for September will be published during the week ahead, which might bring some higher volatility on the markets, in case of deviations from market expectation on inflation figures.
Important news to watch during the week ahead are:
Euro: Inflation Rate final for September for Germany, ECB Monetary Policy Meeting Accounts,
USD: Producer Price Index for September, FOMC Minutes, Inflation Rate for September, Michigan Consumer Sentiment preliminary for October.
The currency pair reached a new lowest level since November last year, by reaching 1.044 during the previous week. This was a point of short reversal to the upside, so the currency pair finished the week at level of 1.058. After reaching a clear oversold side, the RSI moved a bit to the higher grounds, ending the week at level of 43. The level of 50 is still not reached, showing that investors are still not ready to clearly head toward the overbought side. Moving average of 50 days continues with divergence from MA200 counterpart, and confirming the cross occurred as of the end of September.
Eurusd started a short term reversal, after reaching a clear oversold side of the market. The support line at 1.055 was shortly breached to the downside, however, the next long term support line at 1.040 has not been reached, because the currency pair swiftly returned to previous support as of the end of the week. It could be expected that markets will test the 1.055 support line at the beginning of the week ahead. In case that it is not clearly breached, it could expect that eurusd will hold upside momentum and continue toward the next resistance at $1.067. It should be considered that inflation figures for US for September will be published during the week ahead, which might bring some higher volatility on the markets, in case of deviations from market expectation on inflation figures.
Important news to watch during the week ahead are:
Euro: Inflation Rate final for September for Germany, ECB Monetary Policy Meeting Accounts,
USD: Producer Price Index for September, FOMC Minutes, Inflation Rate for September, Michigan Consumer Sentiment preliminary for October.
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