Piece written by Alexa Smith, Trive Financial Market Analyst
The EURUSD currency pair declined for the 8th consecutive week due to a resolute Greenback. This pessimism may be attributed to the fluctuations within the US Treasury market. The 10-year yield surged by 2.08%, bringing medium-term rates closer to an August peak after experiencing a dip a few weeks ago.
Meanwhile, a slew of macroeconomic data releases expected this week could shake things up for the Euro. US inflation data is expected on Wednesday, which could place the Federal Reserve in the spotlight. Core inflation is expected to drop from 4.7% in July to 4.3% in August, while headline inflation rate is anticipated to rise from 3.2% to 3.6% due to the recent upswing in crude oil prices. With the ECB’s interest rate decision also expected this week, the currency pair could see a notable uptick. However, the Federal Reserve holds the potential to shift sight away from the Euro and edge the currency pair lower.
Technical
The EURUSD currency pair traded within a descending channel pattern after a swing-high failed to gain upside traction and met with the channel’s upper boundary instead. Bullish momentum encouraged the price action to surpass the moving average lines, which ran parallel above the currency pair. However, the pair edged lower and established support at 1.06937.
If the price action continues to tick up, the 1.07785 resistance set up by the 50-day moving average could pave the way towards the 1.08123 resistance at the 100-day moving average. A breakdown of the channel’s upper boundary may mark a pivot point for an uptrend. However, the currency pair could attempt to break down the 1.06937 support, which could pave the way towards the 1.06362 major support, where the price action could align with the channel’s lower boundary.
Summary
The EURUSD currency pair edged lower on the backdrop of a resilient Greenback. If the price action edges below the 1.06937 support, the 1.06362 major support could mark the continuation of a descending channel. However, the price action could tick up in anticipation of the ECB’s interest rate decision, bolstering the currency pair towards the 1.07785 resistance.
Sources: TradingView, Reuters
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