EUR/USD’s Momentum Examined Amid ECB Anticipation and Technical Indicators

Arslan Butt•Tuesday, September 12, 2023•1 min read

The EUR/USD pair faces headwinds in maintaining its recent gains, marginally tilting negative as it oscillates around the 1.0740 mark, closely tethered to the significant 1.0750 threshold.

While the receding strength of the US Dollar (USD) has provided some buoyancy, market consensus leans towards the European Central Bank (ECB) retaining a dovish disposition and preserving the status quo on interest rates in the upcoming Thursday policy discussion. However, it warrants mention that any unforeseen declarations or decisions from the ECB could inject volatility, casting shadows of unpredictability over the trajectory of the EUR/USD.

Technically, the Moving Average Convergence Divergence (MACD) underscores a subdued momentum, languishing below the median, albeit nearing the signal line. Immediate floors for the pair appear around the 1.0700 landmark, trailed by the prior week’s nadir of 1.0685. A descent past this could prompt traders to test waters around June’s trough at 1.0661 and subsequently the 1.0650 benchmark.

Conversely, the pair faces a formidable ceiling at the nine-day Exponential Moving Average (EMA) resting at 1.0756, succeeded by the crucial 1.0800 barrier. A decisive breach here might pave the way for a more pronounced ascent targeting the vicinity of the 21-day EMA at 1.0811, intersecting with the 23.6% Fibonacci retracement positioned at 1.0826.

Short-term prognostications for EUR/USD lean bearish, reinforced by the 14-day Relative Strength Index (RSI) persisting south of the 50 demarcations, signifying the probable persistence of downward drift.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.