In today's session we observe that the EUR/USD pair is practically stagnant. Although the U.S dollar remains weak against the majors currencies, the EUR/USD pair ends up failing to take advantage of the USD weakness.
However, there are several points that can support a long-term weak USD.
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Create account Try a demo Download mobile app Download mobile appThe last FOMC meeting ended up not strengthening the USD, after the FED kept the current monetary policy unchanged and the asset purchase program unchanged. Furthermore, Powell goes on to say that there is no need for any kind of FED intervention in the near term.
Technical Analysis: 4-hour time frame chart.
On the 4-hour chart, we can see buyers managed to break above the consolidation zone, but the bullish movement didn’t intensify.
Although buyers price has managed to break above the consolidation zone, in the short term we can identify a downside trend line.
If buyers manage to break the downtrend line, the bullish movement could intensify.
EUR/USD, 4-hour time frame chart. Source: xStation
On the other hand, the dollar index (USDIDX) continues to show signs of selling pressure. We were able to identify the Rising Wedge that was broken down and that justifies the current bearish move.
If the index starts to correct upside, it might be interesting to watch the price reaction near the 61.8% Fibonacci retracement levels, which coincides with the upper limit of the chart structure - Channel.
USDIDX, 4 hours time frame chart. Source: xStation 5
During this session, CAD is the worst performer, while JPY and AUD are the best performer among the majors.
Source: currency-strength.com
Henrique Tomé, XTB Portugal
