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Euro Currency Challenge 23.6% Fibonacci Level

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The euro currency remains on the back foot against the U.S. dollar. The benchmark EUR/USD currency exchange rate is currently trading around the 23.6 percent Fibonacci level after this Forex market could not maintain upside momentum.

The economic calendar is quiet to kick the week off. The United States and United Kingdom are not scheduled to release economic data. Both the euro area and Germany will publish monthly composite purchasing managers’ indices (PMI). The two key events for the single currency and the greenback will occur on Wednesday and Thursday.

The Federal Reserve Board’s (Fed) Federal Open Market Committee (FOMC) and the European Central Bank will publish their minutes of June’s monetary policy meeting minutes. Forex traders will be watching for any signals as to when the FOMC will raise their key policy rate from near zero.

Also, traders also want to see where all 18 members of the FOMC stand on this issue. Traders are also looking for clues regarding tapering of their massive monthly asset purchase program. Currency traders also want clarification where the FOMC stands on inflation and employment.

They will also look at the ECB monetary policy account for the same issues. The ECB, over the next few weeks, will be holding meetings to discuss how to fine tune their monetary policy and their inflation forecasts. They want to finish this review by September.

Daily Euro Currency Technical Analysis (EUR/USD)                        

Looking at the above daily MT 4 price chart, the EUR/USD Forex market is near oversold conditions. The 14 day relative strength index (RSI) is trading below the mid-line and below thirty (30).

The key fifty, one hundred and two hundred (50, 100, 200) daily simple moving averages are sloping lower which signals possible more losses for the euro currency.

Initial technical support lines up at the July low price point at 1.1835. The next downside barrier lines up at the March low price level at 1.1760 with the key 1.17 level then coming into focus. On the upside, former support from June is now an upside barrier.

This level is at 1.1910. The next layer of technical resistance line up at 1.1970. There is a key psychological level in play at 1.20. This barrier is also supported by the 200 day simple moving average.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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