The Euro continues to move within a narrow range for the second straight day, with parity level marking solid resistance and so far limiting the action.

Tuesday’s massive bearish daily candle continues to weigh, along with bearishly aligned daily studies that keeps near-term focus shifted to the downside.

Fresh strength of the dollar on expectations that Fed could opt for even more aggressive action than widely expected 0.75% hike next week, continues to underpin the dollar and keep the single currency under pressure.

Watch the parity and daily Tenkan-sen (1.0031) as these mark initial barriers, which should cap upticks and keep bears intact, while break here would ease immediate downside risk and allow for stronger, but probably limited rebound.

If the recovery picks up extra pace, then the interim hurdle comes at the 55-day SMA at 1.0163 prior to the key 7-month resistance line, today near 1.0180. A move beyond the latter is needed to reduce the selling bias and allow the pair to confront the September high at 1.0197 (September 12) before the 100-day SMA at 1.0325.

In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.0735.

The Fibonacci 61.8% retracement of the latest uptrend forms key resistance at 1.0000. The 50 and the 100-period SMAs on the four-hour chart reinforce that level as well. In case EUR/USD manages to flip that level into support, it could target the 1.0030/40 area (Fibonacci 50% retracement, 20-period SMA) and the 1.0070/80 area (Fibonacci 38.2% retracement, 200-period SMA).

Bears are still in play on EURUSD below the TL

Sep 15 2022