Markets Analysis

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

Markets Analysis

Fundamental Analysis

  • 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.

[EURUSD / D1]

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/ H1]

Market Sentiment

EURUSD Sell: 8% Buy: 92%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Announcement of Australian policy interest rates (Expected to remain unchanged)12:30
Swiss Consumer Price Index15:30
US JOLTS Job Openings23:00

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

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