EUR/USD ANALYSIS TALKING POINTS
- U.S. labor information unlikely to discourage Fed officers.
- EUR/USD weekly lengthy higher wick a priority for euro bulls.
EURO FUNDAMENTAL BACKDROP
The euro stays comparatively cautious right this moment forward of the U.S. Non-Farm Payroll (NFP) print later this afternoon with estimates pointing to a slight decline from August. This being stated, unemployment is about to remain fixed which can maintain the buck supported ought to precise information fall according to expectations.
EUR/USD ECONOMIC CALENDAR
Supply: DailyFX financial calendar
Yesterday’s ECB minutes didn’t reveal something notable with cash markets now reflecting a 85bps rate of interest hike October 27th (see desk beneath). Fears of a worldwide slowdown and recession issues within the eurozone are dominating components that favor the U.S. greenback over the euro in 2022. With no indicators of a ‘Fed pivot’ from Fed officers themselves, it’s tough to see a shift in narrative earlier than yr finish.
ECB INTEREST RATE PROBABILITIES
EUR/USD DAILY CHART
Chart ready by Warren Venketas, IG
Each day EUR/USD value motion this week confirmed one more rejection by bears on the medium-term trendline (black) which coincides with the psychological parity stage. Since then, the euro has slipped again beneath the 0.9854 December 2002 swing low whereas the Relative Energy Index (RSI) echoes short-term elementary uncertainty (NFP) at this level.
- 50-day EMA (blue)
- 0.9854/20-day EMA (purple)
- 0.9601 (September 2002 swing low)
EUR/USD WEEKLY CHART
Chart ready by Warren Venketas, Refinitiv
For me the important thing lies within the weekly candle shut which at the moment illustrates a protracted higher wick (white) candle. Ought to the candle shut on this trend, technical evaluation suggests a continuation of the downtrend going ahead.
IG CLIENT SENTIMENT DATA: MIXED
IGCS exhibits retail merchants are at the moment LONG on EUR/USD, with 57% of merchants at the moment holding lengthy positions (as of this writing). At DailyFX we usually take a contrarian view to crowd sentiment however resulting from latest adjustments in lengthy and quick positioning, we favor a short-term cautious bias.
Contact and followWarrenon Twitter:@WVenketas
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