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EURUSD technical view after Fed Rate Hike updates

EURUSD technical view after Fed Rate Hike updates

The verbal interventions by the Feds’ officials continue with some say that the economy is overheating, while others express that the economy is unstable. What is the EURUSD technical view after the Fed Rate Hike updates?

22 August, AtoZForex – Last Thursday, the president of the Federal Reserve Bank of New York William Dudley once again spoke out in favor of a rate hike in the near term. In his opinion, a too long delay could cause an increase in inflation and the formation of financial bubbles in the economy. His position was supported by Mr. John Williams, which is the head of Federal Reserve Bank of San Francisco. In his speech, he also warned that the country’s economy threatens to overheat if the rate continues to remain low for too long. Followed by these statements, at the end of last week traders began to close short positions on the US currency. Under these conditions, a growth of the Euro ceased. The quote dropped from 1.1365 high and tested the key support level of 1.1300.

However, the last data released on the weak dynamics of retail sales in the United States made a strong impression on the financial markets. This news pushed investors to conclude that on September 2016 the chances of a rate hike by the Federal Reserve is not left. Taking advantage of the situation, the Euro bulls try to push the single European currency to the new highs.

EURUSD technical view

EURUSD 22.08.16 4 Hour chart EURUSD H4 Chart (Click to zoom in)

– The pair is trading above 50, 100 and 200-day moving averages.

– The MACD histogram is located in the positive zone but below its signal line, thus it is not giving any clear signal.

– Stochastic Oscillator is in the neutral zone and generates the buy signal as the% K line rises above the% D.

– RSI is directed upward.

Based on these factors, we think that the downward correction will continue till 1.1280 level. Afterwards, we can witness another attempt to test the previous local maximum at 1.1365 level. However, in the long-term prospect, we consider that the bearish mood will prevail.

Think we missed something? Let us know in the comments section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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