EUR/USD Dips Further Amid Strong USD and ECB’s Rate Hike Pause

Posted Tuesday, October 3, 2023 by
Arslan Butt • 1 min read

The EUR/USD continues its descent, hovering around 1.0465 after slipping past the critical 1.0500 threshold during Tuesday’s Asian session. This decline, marking the pair’s lowest point for the year thus far, is driven by a resurgent US Dollar (USD) and indications from the European Central Bank (ECB) hinting at a potential pause in their rate hike trajectory.

A glance at the four-hour chart reveals that the EUR/USD is trending beneath both the 50-hour and 100-hour Exponential Moving Averages (EMAs), both displaying a bearish inclination. This suggests that the most probable directional bias for the pair remains negative. The Relative Strength Index (RSI), while residing below the neutral 50 level, denotes a bearish stance. Nonetheless, its current position in the oversold territory suggests a potential for some interim consolidation before any further decline in the EUR/USD in the near term.

In terms of immediate dynamics, a definitive breach below the Bollinger Band’s lower boundary at 1.0465 could propel the pair towards the significant level of 1.0400. Subsequent supports are anticipated at the September 25 low of 1.0355 and then at the November 29 low, placed around 1.0320.

Conversely, on the potential rebound front, the EUR/USD’s first resistance is likely to be encountered near the 50-hour EMA, currently situated at 1.0577. A pivotal hurdle lies at the intersection of the Bollinger Band’s upper limit and the 100-hour EMA, marked at 1.0630. Additional resistances to monitor include the September 22 high at 1.0670, trailed by the notable 1.0700 mark.

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