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10/09/24
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EUR/USD Consolidates Around 1.1050 Amid Cautious Market Sentiment
The EUR/USD currency pair appears to be in a phase of consolidation around the 1.1050 level. Current technical indicators do not point to an imminent recovery for the pair. Furthermore, with no significant economic data releases scheduled in the United States, market participants may remain cautious.
Following a bearish end to the previous trading week, EUR/USD continued to face selling pressure and recorded a loss as it closed in the red on Monday. As of early Tuesday, the pair is stabilizing around the 1.1050 level, as traders adopt a wait-and-see approach ahead of key economic events later in the week.
In the initial session on Monday, an increase in US Treasury yields enabled the US Dollar to outperform other currencies. Although a more favorable risk sentiment moderated the USD’s strength in the afternoon session, EUR/USD still managed to decline by approximately 0.5% for the day.
Given the absence of impactful economic reports to sway the USD’s performance on Tuesday, market focus is likely to shift towards risk sentiment. At the time of observation, futures for U.S. stock indexes remained relatively unchanged. Should safe-haven assets attract demand ahead of the upcoming Presidential Debate, EUR/USD may struggle to maintain its footing.
Meanwhile, many investors might prefer to hold off on significant trades as they await crucial data releases, including the Consumer Price Index and the European Central Bank’s scheduled policy announcements later this week.
From a technical standpoint, the Relative Strength Index (RSI) on the 4-hour chart indicates a value below 40, and EUR/USD is trading beneath the 20, 50, and 100-period Simple Moving Averages. Immediate support is noted at 1.1040 based on the Fibonacci 38.2% retracement level. A failure to hold this support could lead to a decline towards the 1.1000 – 1.0990 range, considered a significant bearish target, followed by the 1.0940 mark. Conversely, upside resistance can be identified at approximately 1.1070, with further levels at 1.1100 and 1.1160.
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