EUR/USD Analysis: Navigating Market Pressures and Consolidation Ranges
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EUR/USD
On Tuesday, the euro continued to face pressure from Monday, even slightly more so due to the decline in commodity prices (crude oil down 2.1%) and as U.S. Treasury yields fell. German industrial production dropped in September by 1.4% compared with the previous month (-3.86% YoY), which fueled concerns about a European recession.
Now we are waiting to see if other news will support the euro's upward movement. However, we don't expect to receive any news today or tomorrow, unless Federal Reserve Chair Jerome Powell or John Williams suggests an the end to the rate hike cycle. On the other hand, a certain event that could exert pressure on the dollar would be the so-called U.S. "government shutdown", as the emergency 45-day funding measure is set to end on November 16. Congressional leaders struggle to reach an agreement over the 2024 budget year limit. Take note that market participants may already be preparing for this event.
On the daily chart, the lower shadow carefully tested the support of the MACD line. Now, the euro has established a consolidation range between yesterday's low and the Fibonacci level at 1.0665-1.0750. Settling below 1.0665 could lead to a decline towards the price channel line around the psychological level of 1.0500, while a move above 1.0750 opens the target range of 1.0834/57. The uptrend remains intact.
On the 4-hour chart, the bullish momentum remains intact. After retreating, the price is now staying above the indicator lines, and the Marlin oscillator may form a bullish reversal from the neutral zero line.
