(Eren Sengezer – FXStreet)
– EUR/USD has been having a hard time overcoming the 0.9900 hurdle.
– The near-term technical outlook points to a bullish tilt.
– CB Consumer Confidence Index data will be featured in the US economic docket.
EUR/USD has managed to regain its traction and climbed toward 0.9900 early Tuesday. The pair, however, seems to be struggling to gather enough momentum to clear that level. Nevertheless, the near-term technical outlook suggests that the pair has more room on the upside.
The disappointing PMI surveys from the US, which revealed that the economic activity in the private sector continued to contract at a strengthening pace in October, caused the greenback to lose interest in the second half of the day on Monday. With investors remaining optimistic about the Fed looking to adopt a less aggressive tightening stance toward the end of the year, Wall Street’s main indexes registered strong gains and allowed EUR/USD to benefit from the improving market mood.
On Tuesday, the data from Germany showed the headline IFO Business Climate Index eased slightly to 84.3 in October from 84.4 in September. This reading came in slightly better than the market consensus of 83.3. Commenting on the data, IFO Economist Klaus Wohlrabe said that they were expecting the German Gross Domestic Product (GDP) to contract by 0.6% in the fourth quarter of the year. Nevertheless, the IFO sentiment survey failed to trigger a noticeable market reaction.
In the second half of the day, the Conference Board will release the US Consumer Confidence Index for October. Monday’s reaction to the PMI surveys suggests that a negative print is likely to weigh on the dollar and vice versa. Market participants will also keep a close eye on stock markets. US stock index futures were last seen trading flat on the day and in case major equity indexes manage to build on Monday’s gains, EUR/USD could gather bullish momentum during the American trading hours.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the four-hour chart started to edge higher after having declined toward 50 on Monday, pointing to a bullish shift in the short-term outlook. On the upside, 0.9900 (psychological level, static level) aligns as key resistance. A four-hour close above that level could open the door for another leg higher toward 0.9930 (static level) and 1.0000 (psychological level, static level) afterwards.
0.9840, where the Fibonacci 50% retracement and the 200-period SMA coincide, forms strong support ahead of 0.9800 (Fibonacci 38.2% retracement of the latest downtrend, 100-period SMA) 0.9750 (Fibonacci 23.6% retracement).
EUR/USD flirts with the long-term downtrend line – American Indices climbing higher
(Tomasz Wisniewski – Axiory Global Ltd.)
In today’s Trader’s Edge Market Briefing, Tomasz found these unique setups that we thought you’d find interesting.
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