The long-awaited NFP report turned out to be a disappointment to many investors who were looking forward to September's results with high expectations. Markets ended up reacting to periods of high volatility and the foreign exchange market was no exception, although the main currency pair continued to trade in a stable manner.
Let's take a closer look at the current situation of the EUR/USD pair.
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Since sellers managed to break below the support zone marked at 1.1700, the bearish movement has intensified in the EUR/USD pair.
However, in the short term it is possible to see that the pair has been consolidating for several days.
EUR/USD, Daily chart. Source: xStation 5
In the 1 hour time frame chart, it is possible to see that the highs have been getting lower and lower.
Right now, and despite the price being trading laterally, we can identify a bullish channel in which it could justify a continuation of the bearish movement.
Therefore, there are two fundamentals that could keep the current downtrend valid.
The upper boundary of the structure that coincides with the Fibonacci levels at 61.8% and the lower boundary of the structure (channel) once it is broken.
On the other hand, if buyers breach above the upper bound of the channel, the bearish scenario could be void.
EUR/USD, 1 hour time frame chart. Source: xStation 5
US dollar Index (USDIDX)
Looking at the US Dollar Index, the 4-hour chart, we can see that there is still some indecision in the index.
There is a graphical structure that continues to support the possibility of bearish USD, however, the price has been consolidating since testing the upper bound of the rising wedge.
The bearish scenario could be void once buyers break above the structure.
USDIDX, Daily time frame chart. Source: xStation 5
During this session, the AUD leads the gains during today's session
Source: currency-strength.com
Henrique Tomé, XTB Portugal
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.