USD On The March, Key Levels For the EUR/USD
Shain Vernier • 1 min read
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.
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.
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.