As of Wednesday, the EUR/USD is stable in its three-day range bound state at 1.1700. Although the pair has had a recent resurgence, the prognosis for the pair in the short term is less certain. If the bullish momentum continues, there are temporary resistance levels at the 10-day simple moving average (SMA) of 1.1772 and the 1.1790 zone, which contains the 55- and 20-day SMAs as well as a Fibonacci retracement point (of the June-August drop).
It is expected that a collapse of the September bottom at 1.1700 will reveal the 2021 lowest at 1.1663 which was set on August 20. In the meanwhile, the EUR/USD is regarded as having a bearish near-term outlook when trading below the important 200-day simple moving average (SMA), which is now at 1.1982. Market mood rises as a result of the Evergrande deal and the extension of the US debt ceiling. Inflation risks are cited by officials at the European Central Bank. The Federal Reserve is still in the spotlight because it is anticipated to offer clues about when it will begin tapering.
EUR/USD CHART. Source: Tradingview.com
With the EUR/USD trading at 1.1730, it is trading underneath the 61.8 percent retracement of its most recent daily rise at 1.1755, which serves as the duo’s nearest barrier. The short-term outlook is moderate to bearish, as the pairing is now lingering near a bearish 20 SMA, which is continuing to go down below the longer-term ones. Despite crossing into new highs, the Momentum indicator lacks strength, and the Relative Strength Index (RSI) is settling in about 43 points. Bears will almost certainly add to their position if the price of gold falls below 1.1700. Support levels are as follows: 1.1700, 1.1660, and 1.1620, while 1.1755, 1.1770, and 1.1840 are the Resistance levels.
Review of the Fundamentals
EUR/USD is gently consolidating a few basis points just above the 1.1700 level, with capital markets in a state of “wait and see” before the Federal Reserve’s fiscal policy announcement. The central bank is generally predicted to keep its fiscal system on pause, as macroeconomic statistics complement the dovish trend observed in August. Inflation has retreated from its highs, strangely following regulators’ transitory idea, while jobs growth continues slow. Furthermore, worries connected to the proliferation of the Delta strain put a halt on authorities.
However, the US economy is growing, as the Q2 Gross Domestic Product was verified at 6.6 percent QoQ. Therefore, the Fed can’t escape the cutting issue. The best regulators can do is postpone it till 2022, which will probably be a decent start to stocks to the disadvantage of the Dollar. Before the event, the US will announce August Current Property Sales while the EU will disclose the quick assessment of this month’s Consumer Confidence, anticipated at -5 from -5.3 earlier.