EUR/USD Continues to Decline, Approaching the Key Level of 1.0500【September 28, 2023】

September 28, 2023

Markets Analysis

Fundamental Analysis

  • Significant decline in EUR/USD, dropping for the 11th consecutive week.
  • With economic slowdown in the EU and the end of interest rate hikes, funds are flowing more easily into the USD.
  • It might take some time before the price goes below 1.05 dollars.

EURUSD Technical Analysis

Analyzing the daily chart of EUR/USD, we can confirm that it is moving between the -2σ to -3σ of the Bollinger Bands. Despite the downtrend, the RSI is hovering around 30, suggesting potential for a bounce back.

The price is nearing the round number of 1.05 dollars, and it’s expected that there are many buy limit orders placed. Observing market sentiment, 91% are on the buying side, suggesting the need for caution against sudden price fluctuations. A return to the level near the conversion line of the Ichimoku Cloud is also possible.

One reason for this trend is the end of interest rate hikes by the ECB, making it easier for funds to flow into the USD.


Day Trading Strategy (Hourly)

Analyzing the 1-hour chart, there’s evidence of buy orders after the price dropped below 1.05 dollars, leading to a bounce. RSI has also risen from 26 to 35, indicating a potential return to the 24-period moving average. A recovery to around 1.0535 dollars is anticipated.

Fundamentally, the market conditions favoring the USD due to potential further rate hikes remain unchanged, suggesting a resurgence in selling pressure. While caution is needed at the end of the month, a bearish stance is preferable. Look out for moments when the RSI reaches 50 and then resumes a downward trend.

The day trade approach is to sell on rallies. Entry is anticipated around 1.0535 dollars. Exit is expected around 1.0418 dollars. A stop is considered at 1.0555 dollars.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

1.05 USD – An important round number milestone.
1.0418 USD – Monthly support line.


Market Sentiment

EURUSD Sell: 9% Buy: 91%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Australia Retail Sales10:30
European Central Bank Economic Report17:00
German Consumer Price Index21:00
US Gross Domestic Product (GDP)21:30

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.

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