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USD On The March, Key Levels For the EUR/USD

The last four sessions have good ones for USD backers, especially vs the Euro. Prices have dropped over 125 pips and continue to trend beneath the 1.1600 handle. At the moment, it appears that traders are betting on a hawkish U.S. FED to dominate sentiment as the September 25-26 meeting approaches.

On a practical note, the CME FEDWatch Index is beginning to heavily favor a fourth rate hike for 2018. The odds of a September rate hike are currently 99%, with December earning a 71% chance of a 25 bps bump north. It appears that more gradual tightening is what the markets expect for the remainder of 2018.

EUR/USD Technicals

Today’s forex session has brought EUR/USD bears out of retirement. Values are off nearly 50 pips but intraday time frames are showing a moderate buyback after the session low at 1.1530 was posted.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

Here are the key levels to watch for the remainder of the U.S. session:

  • Support(1): Bollinger MP, 1.1546
  • Support(2): Daily SMA, 1.1479

Overview: In a live market update from last Friday, I outlined the possibility of 1.1550 setting up as downside support. This level has been tested extensively today, with sellers keeping the heat on throughout the late-European and early-U.S. session.

At press time, prices have rallied to the 1.1575 area. If we see a close above 1.1550, then a buyback of today’s losses may be in the cards for the Wednesday session. Friday is going to be a red letter day for the EUR/USD. The Eurozone GDP, as well as U.S. Non-Farm payrolls, are scheduled for release. If nothing else, we are likely to see some fireworks going into the weekend.

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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