Daily Technical Analysis:
EUR/USD has not tested SMA5 and SMA15 yesterday. SMAs are now moving and contracting in bullish sequence, with market is moving below all three SMAs.
RSI is showing decreased bullish strength with 57% reading. RSI is now reverting back from uptrend in downward direction below resistance level (70%).
Upper is straight, while Middle and lower bands are moving upward with squeezing bands. It signals that market is decreasing bullish volatility. Market is moving slightly above middle band.
With Lutfi Magnet theory market is 85% bearish and with adjustments 75% bearish. Lutfi Magnet Theory and Adjustment are showing bearish sentiment.
On the basis of Technical Analysis initial bias remains bearish. Market may attempt low at middle band 1.2838 and break there may extend the bearish move to low at monthly magnet 1.2815. While on higher side it may follow consolidation to attempt high at daily pivot point 1.2909, break there may attempt high at SMA5 1.2935.
The euro held steady against the dollar Wednesday, up in an otherwise risk-off trading session after a Federal Reserve governor blasted the U.S. central bank’s decision to jolt the U.S. economy with a third round of asset purchases from banks, arguing the policy won’t lead to recovery.
Earlier, Federal Reserve Bank of Philadelphia President Charles Plosser, a noted inflation hawk, said a decision to roll out a third round of quantitative easing to encourage investing and hiring won’t work in that households and businesses would rather pay down debts than take on new leverage. Quantitative easing functions via pumping liquidity into the financial system in a way that pushes down interest rates across the economy to encourage borrowing.
Bullish U.S. housing data sent the dollar rising against the single currency as well before the euro regained composure early in Asian trading. The Standard & Poor’s/Case Shiller House Price Index showed that home price in 20 cities rose 1.2% in July of this year compared with the same month a year ago. Analysts had expected the closely watched gauge on home prices to rise 1.0% in July. Elsewhere, the Conference Board, an industry group, reported that its consumer confidence index rose to 70.3 in September from an upwardly revised 61.3 in August. September’s reading was the highest since February and outpacing analysts’ calls for a 63.0 reading.
The euro did see support, however, on news that German Finance Minister Wolfgang Schauble said European policymakers should do everything in their power to protect the single currency, pointing out that defending the euro was “worth any effort.” Talk that lawyers in Germany are examining the legality of the European Central Bank’s bond purchasing program offset Schauble’s bullish comments for the euro.
Here is schedule for today’s important data:
German CPI: Tentative. Each German state releases the initial estimate of the consumer price index at a different time during the day. A stronger than expected rise of 0.4% was recorded in August. This time, prices are expected to remain flat.
US New Home Sales at 07:00pm. Sales of new homes edged up 3.6% in July reaching 372,000 units, following another good reading of 359,000 units in the previous month. Analysts predicted an increase to 363,000 confirming the recovery trend in the housing market. A further rise to 381,000 is forecasted.
EUR/USD started the day at 1.2929. Euro attempted high at 1.2969 and with a downward move attempted low at 1.2885. Euro closed the day at 1.2896.