The EUR/USD pair recovered above the 0.9800 threshold after spending the first half of the day at around 0.9770. Demand for the American Dollar receded overnight, despite the market mood remains sour. Global stocks remain on the back foot, struggling to leave the red, although Wall Street’s futures are on the rise as strong earning reports cooled recession concerns.

In case of the continuation of the rebound, the pair faces an interim hurdle at the 55-day SMA, today 0.9941, ahead of the more relevant 8-month resistance line around 0.9960. The surpass of the latter is needed to mitigate the downside pressure and spark a more lasting/serious recovery to, initially, the October peak at 0.9999 (October 4).

In the longer run, the pair’s bearish view should remain unaltered while below the 200-day SMA at 1.0544.

EUR/USD is also benefiting from UK political noise. The British Pound is up amid Prime Minister Liz Truss's announcing her decision to leave the government after the failed attempt to bring financial stability, triggering exactly the opposite.

The EUR/USD pair has recovered part of the ground lost on Wednesday, but the chances of a firmer recovery are still unclear. The daily chart shows that technical indicators lack directional strength while hovering around their midlines, in line with the absence of a near-term trend. At the same time, a mildly bearish 20 SMA provides intraday support, although the longer ones maintain their downward slopes well above the current level. In between, a daily descendant trend line coming from the year high at 1.1494 provides resistance at around 0.9970.

The 4-hour chart offers a neutral-to-bearish stance. The pair hovers between directionless moving averages, reflecting the absence of clear speculative interest one way or the other. Meanwhile, the Momentum indicator is flat just below its midline, while the RSI aims marginally higher within neutral levels.

EURUSD providing a small hawkish setup.

Oct 20 2022