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This currency pair continues to deliver an opportunistic trend upwards that may attract retail traders to pursue. The currency pair certainly is not surging higher in an extravagant manner, but intraday results continue to technically show rather efficient support levels that conservative speculators may want to participate. The cautious sentiment that lingers in global markets however means that financial institutions could adjust their thinking quickly in what has become a game of trying to take advantage of what has been believed to have been an oversold EUR/USD and its reversal higher.
EUR/USD Recovery Holds Despite Fed and Inflation Risks
While upside is being challenged in the EUR/USD there have also been periodic bouts of pushback, not allowing the currency pair to transcend loftier heights. Next week’s Federal Reserve meeting and rate decision coming on Wednesday is certainly in the mindset of traders. Financial institutions seemingly have bought into the notion that the Fed will not raise its Federal Funds Rate on the 28th, but retail traders need to understand that this perception has already been traded into the marketplace.
What financial institutions are watching is the price of energy and its effect on inflation, elevated U.S bond (and European) yields, and the coming mid-term elections from the States which could potentially affect investor confidence. The EUR/USD has sustained upwards momentum, but is still within sight of lower realms if mindsets should change. However, the likelihood of a sudden strong selloff may not be likely today or tomorrow, unless a major risk events were to unfurl.
Repeated Selling Limits EUR/USD’s Upside
The EUR/USD is near 1.124450 as of this writing as it faces early morning headwinds and fights to establish a steady ground. The currency pair did hit the 1.12565 vicinity earlier today but was sold off rather abruptly. This morning’s early high did not surpass Tuesday’s upwards draft which saw the 1.12600 level get challenged briefly. Intriguingly the high on Friday of last week penetrated the 1.12700 level. Some technical traders may perceive the listed results and lowering of high water marks that downside currents remain in vogue.
Yet, there has been a solid support band achieved taking into consideration the 1.12100 to 1.12075 had held firm the past few days. Traders of the EUR/USD will need patience to achieve targets if they extend beyond a quick hitting search for profit, but being overly ambitious in what are still cautious markets might prove tricky. The EUR/USD continues to provide fast shifting values and this will continue into this weekend as anxious conditions remain intact.
The Recovery Faces Overbought Pressure
Trying to take advantage of the EUR/USD in the short and near-term will likely consist of trying to ride a chosen direction for a limited amount of time. The EUR/USD appears to have created a consolidated realm in which financial institutions appear comfortable for the moment. Higher price action continues to get pushed back when overbought signals are hit, but the downside price action has been limited.
The question technical traders who feel they have a grasp of the concerns that surround the USD centric strength which has been seen over the past month – is how to decipher when momentum will ignite and knowing when to get out of the trade. Some optimistic EUR/USD may still feel the currency pair remains in oversold conditions even if it trades near 1.12500, but financial institutions have not been able to sustain highs that have been produced the past few days.
EUR/USD Price Chart – a Range
Cautious Sentiment Keeps EUR/USD Range-Bound
While a cloud of caution remains stark and above the global markets, this seemingly has created the tendency to produce results which remain suspicious. This sentiment is likely keeping a surge of potential buyers of the EUR/USD away from the currency pair still. Too many concerns surround potential risk events, and the anxiousness surrounding the possible nervous reactions is causing a choppy EUR/USD to remain. However, technical traders may be quite comfortable in the current conditions if they pursue quick hitting targets effectively.
Buyers Retain an Edge Above Recent Support
Short-term traders of the EUR/USD need to remain alert. The broad Forex market has shown the USD giving up some of its recent power, but enough nervous sentiment remains in the global marketplace to reignite selling. Yet, buyers do have intriguing technical near-term results produced the past few days to consider betting on upside periodically. Looking for upside after selloffs may remain a chosen tactic.
EUR/USD Short-Term Outlook
EUR/USD is trading near 1.12445 after holding above the 1.12420 support area, preserving the gradual recovery despite repeated selling near recent highs. A sustained move above 1.12470 could open the way toward 1.12590, where buyers would need to show stronger conviction to extend the rebound. Conversely, a break below 1.12420 would expose 1.12260 and suggest that caution ahead of the Federal Reserve meeting is regaining influence. The pair’s behavior around support may reveal whether the recovery has enough backing to continue.
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