The EUR/USD pair plummeted on Tuesday, giving back most of its weekly gains, to trade at around 0.9770 ahead of the US opening.

Data-wise, the European Union released the final version of its September Consumer Price Index, which was downwardly revised to 9.9% YoY. On the other hand, the US published September Building Permits, up 1.4%, and Housing Starts, down by 8.1% MoM.

The EUR/USD pair is at risk of falling further, according to the daily chart. It is currently pressuring a bearish 20 SMA, while the longer ones keep heading firmly lower, well above the current level. Technical indicators, in the meantime, crossed their midlines into negative territory, with strong downward slopes.

The near-term picture is aligned with the longer one, as the 4-hour chart shows that the pair was unable to advance beyond a mildly bearish 200 SMA. EUR/USD also pierced a now flat 20 SMA and is battling with an also directionless 100 SMA. At the same time, technical indicators turned lower, with the Momentum barely holding above its 100 level but the RSI already at 45. A bearish extension could be expected on a break below 0.9750, the immediate support level.

EUR/USD is seeing consolidation and we continue to look for this to extend for a while yet for a potential retest of 55-day average and price resistance at 0.9950/1.000 which we look to ideally cap again. A closing break higher though would warn of a deeper recovery to 1.0198, potentially 1.0350/69.

EURUSD Can Reverse From SMA50 and SMA200

Oct 19 2022