FXStreet (Guatemala) – Valeria Bednarik, chief analyst at FXStreet explained that the American dollar came under renewed buying interest early in the US session, rallying to fresh highs against the EUR and the AUD, and maintaining its recent gains against other rivals.
Key Quotes:
“Once again, there were no relevant macroeconomic news to guide investors, but the conviction over an upcoming US rate hike next December prevailed, even despite US treasury secretary Lew expressed concerns over international woes affecting the US economy. Nevertheless, his words of caution were not enough to revert the greenback´s upward momentum, and the EUR/USD pair plunged down to 1.0673. The US has a bank holiday this Wednesday, pointing for another quiet trading day in the pair, at least from the fundamental front.”
“Technically, however, and as said on previous updates, the bearish potential is firm in place, with no signs of a change in the long term bias, based on the clear imbalance between both economies’ monetary policies. The 1 hour chart shows that the pair has been unable to recover firmly above the 1.0700 level during the American afternoon, trading around the figure by the US close. In the same chart, the 20 SMA heads lower above the current price whilst the technical indicators are bouncing from oversold readings, but remain well below their mid-lines.
In the 4 hours chart, the 20 SMA has extended further low, now around 1.0775, while the RSI indicator is barely bouncing from oversold readings and the Momentum indicator aims higher below its 100 level, suggesting an upward corrective movement is under way. A recovery up to 1.081 will hardly affect the ongoing bearish tone, but rather fuel the decline after the upward corrective movement is complete.”
(Market News Provided by FXstreet)