EURUSD made a bearish reversal and went through a strong dive last week, losing more than 2 cents and falling below 1.10. This shows that buyers have
EURUSD made a bearish reversal and went through a strong dive last week, losing more than 2 cents and falling below 1.10. This shows that buyers have given up on the bullish trend and now this forex pair will be heading for 1.08, if the 100 weekly SMA at 1.0970 gets broken.
The EUR/USD pair saw significant gains in June and July, climbing from under 1.07 to reach 1.12. This rise reflected strong buyer interest in the Euro during this period. Following a pullback in August, EUR/USD retested the upper levels and maintained its position near 1.12 until last week. However, buyers struggled to sustain this momentum, and the pair subsequently turned downward, dipping below the 1.10 mark as they failed to breach the resistance zone.
EUR/USD Chart Weekly – The 100 SMA Held As Support
Weakening Euro Fundamentals
The Euro’s fundamentals have recently turned bearish. The Eurozone economy remains sluggish, with inflation continuing to decline, as evidenced by the latest CPI data. Additionally, the services sector has shown marked deterioration, and manufacturing remains in a deep recession. These factors have prompted the European Central Bank (ECB) to adopt a more dovish approach, suggesting limited support for the Euro in the near term.
USD Strength on Positive Economic Indicators
In contrast, the US Dollar has strengthened on the back of solid economic data, notably the robust September Non-Farm Payrolls (NFP) report, which showed job gains exceeding 250K compared to less than 100K in August. This data has reduced expectations for a 50 basis point rate cut from the Federal Reserve in November. The strengthening USD has driven EUR/USD below 1.10, with the market closely watching whether this level will act as resistance as the new trading week begins.
Should the downward trend continue, the 100-week Simple Moving Average (SMA) might soon be tested. If this support breaks, the pair could head towards the 1.08 level, where additional weekly SMAs may provide potential support. Traders will be monitoring these levels closely, as a breach could indicate further declines for the Euro against the Dollar.
Eurozone Retail Sales for September
Eurozone Sentix Investor Confidence for October
EUR/USD Live Chart
EUR/USD
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