EUR/USD Analysis Report: Assets with a high perceived risk have recovered their appeal as the market has become upbeat.

Nov 04, 2022

VOT Research Desk

After registering a respectable amount of purchasing activity of roughly 0.9743 during the Tokyo session, the EURUSD pair has provided a firmer reversal.

As the risk-on impulse has gained momentum again, the asset has extended its recovery move and is attempting to retake the immediate resistance level of 0.9800. Concern over the US Nonfarm Payrolls (NFP) has caused the powerful US dollar index (DXY) to retest its day’s low of 112.50.

The 10-year US Treasury yields have decreased to almost 4.14% in the meantime.

The major has recovered on a four-hour time frame after challenging the upward-sloping trend line established from the low point in September at 0.9536.

The item is, nevertheless, being offered below the 20- and 200-period EMAs, which suggests that the trend is still bearish.

While the momentum oscillators triggered oversold signals, the Relative Strength Index (RSI) (14) rose after falling to close to 27.65.

Higher-low structure and oversold momentum oscillators are indicating that the Euro will get smart money inflows.

The asset will go toward its high from October 23 at 0.9900 if it breaks through the immediate resistance level of 0.9800, then it will reach parity.

On the other hand, if it falls below the low of 0.9705 set on October 21, the Euro may lose strength. This will cause the asset to fall toward its lows from September and October, which are 0.9536 and 0.9632, respectively.