12 September, AtoZForrex.com, Vilnius – Ignoring mixed Euro fundamentals, investors unwound risky EUR funded positions ahead of September 17 FOMC meeting, resulting in increased EUR account surplus.
Technically EURUSD has concluded the devaluing move dictated by Fibonacci rules from 110% to 61.8% retracement levels at 1.156 and 1.11 respectively. Current price halt near a custom Fibonacci 88.2% retracement zone stresses the importance of the level.
Thus, with a preliminary target reached, we might see Euro falling on 1.131 local hourly high at a break of a new week.
Yet, as we have a bullish momentum in a background of weekly and daily timeframes, indicated by RSI and MACD, a runner-up rally reaching a resistive combination at 1.14 should follow. The level will judge the further move. Should the momentum continue, we may witness a targeted bullish rally to 100% Fibonacci retracement level at 1.1466 and finally to underling monthly Fibonacci 61.8% retracement level at 1.17.
Worth commenting that both weekly RSI and MACD are at the zones last time probed at a dawn of the underling trend. May it be a sentiment changer?
Immigrant crisis, Greece, dovish ECB, all ongoing disconcerting events appear to be overshadowed by the Fed.
Despite the policymaker discrepancy, the central bank’s view leans towards September hike. However, with contrasting fundamentals and confirmation from the IMF and the World Bank, the date has been dismissed by the market participants, resulting in EUR appreciation. Therefore, likely Fed disappointment at the Thursday’s event will lead to succumb of the USD bulls.
Personally I would suggest to target the move into FOMC towards the 61.8% monthly Fibonacci retracement zone. In addition to the technically analysed bullish perspective, we can place a breakout order ahead of the FOMC event targeting the 1.17 level. As the Fed is likely to withhold, the disappointment would rip the USD across the board.
May we witness a lift-off, exactly an opposite would happen. Thus the alternative opportunity could be taken accordingly. However, do not be deceived by tempting USD strength. The decision would poise the US economy to fail.
Support & Resistance