The release of the minutes of the last FOMC meeting ended up boosting the U.S dollar and, since then, the USD has been appreciating strongly against the forex majors pairs.
The EUR/USD naturally ended up suffering the consequences of a stronger dollar and has been trading under pressure for several weeks now.
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Technical Analysis EUR/USD: Daily time frame chart.
On the daily chart we see that the pair recently broke the lows of the 8th of August, but since then buyers have been trying to regain control over the price.
Furthermore, we were also able to verify that we are facing an important support zone in which the price has been respecting since November last year and, therefore, it is not expected to be an easy zone to break.
EUR/USD 4 hours time frame chart
Using a shorter time frame, we can see that we are facing a Falling wedge where buyers are about to break above the structure.
If a break above this structure emerges and buying strength prevails, then the euro could regain some ground against the US dollar in the short term.
EUR/USD, 4 hours time frame chart. Source: xStation 5
US dollar Index (USDIDX)
On the other hand, if we take a look at the daily chart of the US dollar, we see that buyers are struggling to break through the resistance zone marked at 93,231.
Right now, the index is showing signs of selling pressure and if the pressures continue, the EUR/usd pair could benefit.
USDIDX, daily time frame chart. Source: xStation 5
AUD and CAD are the best major performers, while the USD and JPY are the worst performers among the fx majors.
Source: currency-strength.com
Henrique Tomé, XTB Portugal
