Decline in the EUR/USD continues, with interest rate hike cessation and surging crude oil prices in the background.【October 3, 2023】
October 03, 2023
- The EUR/USD continues its decline, with unstoppable US dollar buying and capital outflows from the EU zone.
- The US contemplates interest rate hikes, while there are speculations of the ECB concluding its rate hikes, possibly leading to the selling of the Euro.
- The EUR/USD breaks below 1.05, updating its lows.
EURUSD Technical Analysis
Analyzing the daily chart of the EUR/USD. Currently, the 72-day moving average is approaching the 120-day moving average from below, with the potential for a bearish crossover (dead cross signal) which suggests a strengthening of the downtrend.
On the other hand, the RSI stands at 31, nearing the oversold level. This could result in a short-term rebound for profit-taking. Such a bounce could be seen as an opportunity for re-entry selling.
With the price below the 24-day moving average, the current situation suggests that the downtrend is continuing. However, if there’s a move above the 10-day moving average, caution is needed for a potential temporary bounce.
Day Trading Strategy (Hourly)
Analyzing the 1-hour chart of the EUR/USD, it has broken below 1.05, updating its lows. The trend of the moving averages indicates a perfect order, suggesting a continuation of the declining trend. Especially, if the 72-hour moving average turns downwards, increased selling pressure is highly likely.
From a fundamental standpoint, given speculations of ending interest rate hikes, expectations of additional US rate hikes, and soaring crude oil prices, there’s a continued environment favoring Euro selling, and a move targeting 1.02 is plausible.
For a day trading strategy, consider a sell entry at 1.0485, a take profit at 1.0414, and a stop at 1.0515.
Support and Resistance Lines
The resistance line to be considered in the future is as follows
1.051 USD – Pivot Point
1.050 USD – Round Number
1.041 USD – Major Support Zone
EURUSD Sell: 8% Buy: 92%
Today’s Important Economic Indicators
|Economic Indicators and Events||JST (Japan Standard Time)|
|Announcement of Australian policy interest rates (Expected to remain unchanged)||12:30|
|Swiss Consumer Price Index||15:30|
|US JOLTS Job Openings||23:00|
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.