Euro versus US Dollar failed to recapture the 61.8% fibo retracement zone near 1.1732, instead broke below 1.1660 - which drove EURUSD towards 1.1526, missing 50% fibo retracement level by a few pips. Resuming economic activity faces a considerable hurdle in bottlenecks and supply chain disruptions, as the recovery is uneven across the globe. Soaring gas prices and the subsequent pressure on inflation are part of this disruptive scenario. The American dollar benefited from this situation amid its safe-haven condition but also strengthened on relief headlines and speculation of soon-to-come tapering. On the other hand, the shared currency was pressured by dismal local data, indicating slowing growth in the year's final quarter. From the current market structure and oversold conditions on the daily chart calls for a bullish reversal in terms of a correction towards exponential moving average 200 on the daily chart and if supported by bullish momentum enough, maybe exponential moving average 50 as well, which might become a zone of continuation of dovish trend. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The EUR/USD pair remains below the 1.1600 level, and the weekly chart shows that the pair is posting losses for a fifth consecutive week. The pair is currently struggling with the 200 SMA and trading a handful of pips below the 100 SMA. Meanwhile, the 20 SMA maintains a strongly bearish slope well above the current level.  At the same time, technical indicators remain within negative levels, consolidating losses near their September lows. A break below the year low at 1.1528 exposes the 1.1460/70 price zone, a long-term static resistance area and a potential bearish target. A break below it should lead to a test of the 1.1390 price zone. The pair could recover further if it overcomes 1.1640, although selling interest will likely reappear on an approach to the 1.1700 figure.

EURUSD

Oct 09 2021