Oct 04, 2022
VOT Research Desk
On the back of US Dollar weakness, EUR/USD is trading close to last week’s high (0.9854); nevertheless, the current recovery in the exchange rate seems to be stalling before the previous support area near the July low (0.9952) as it struggles to extend the series of higher highs and lows from last week.
The Relative Strength Index (RSI) has recovered from oversold territory after the unsuccessful attempt to test the June 2002 bottom (0.9303), and if it can push back above the previous support area near the July low, the exchange rate may try to test the 50-Day SMA (1.0016). (0.9952).
The Federal Reserve’s restrictive monetary policy, however, may cause the EUR/USD to follow the downward slope in the moving average, and the ECB’s September meeting, where the Governing Council “frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to our two percent medium-term target,” may have little impact on the exchange rate.
The Relative Strength Index (RSI) has recovered from oversold territory after the unsuccessful attempt to test the June 2002 bottom (0.9303), and if it can push back above the previous support area near the July low, the exchange rate may try to test the 50-Day SMA (1.0016). (0.9952).
The Federal Reserve’s restrictive monetary policy, however, may cause the EUR/USD to follow the downward slope in the moving average, and the ECB’s September meeting, where the Governing Council “frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to our two percent medium-term target,” may have little impact on the exchange rate.
