Home Forex EURUSD: Week Ahead 12-16 September 2022

EURUSD: Week Ahead 12-16 September 2022

by SuperiorInvest
EURUSD, daily

EURUSD rose +0.43% on Friday to close at 1.0035, slightly below the 26-day EMA. The pair rose to a 3-week high with the release 1.0113 (50.0% FR) on positive carryover from Thursday, when the ECB raised its key refinancing rate by 75bp to 1.25%, with signs of further rate hikes.

Hawkish comments from the ECB over the weekend pushed German 10-year bond yields to 2-month highs and strengthened euro differentials. Member of the Governing Council of the ECB Node said the ECB’s 75 basis point rate hike on Thursday was a strong and big signal, but more steps should follow, while another colleague Kažimír said the ECB must continue to raise significantly to cope with very large price increases. Muller warned that delaying rate hikes is riskier.

European gas prices continue a gradual but drawn-out correction from historic record levels reached two weeks ago, as European energy ministers consider new mechanisms to curb unreasonably high prices, or at least try to mitigate the negative impact of those prices on the larger economy.

Technical analysis

EURUSD did not show significant changes after the increase in interest rates by the ECB. The pair is still under the control of the bear. The intraday bias at the beginning of the week tends to be neutral. On the other hand, price action will retest the parity level before there is a significant change in regional economic sentiment. There are 2 intraday supports to consider below parity 0.9930 and low 0.9086. Consolidation trading is likely to continue within the price range 0.90861.0113, before any change. A step up 1.0113 could test the level of 61.8%. 1.0368 and 0.9086 approaching to 1.0200 round shape mark. However, the outlook will remain bearish as long as there is resistance to 1.0368 remains intact.

A divergence divergence is evident from the Oscillation indicator, but requires confirmation of a downward trend line break first.

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Ada Phangestu

Market Analyst – HF Educational Office – Indonesia

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