EUR/USD: outlook for September 26-30
EUR/USD made another attempt to overcome 100-week MA – this line is currently just below 1.1240 – but once again this attempt wasn’t successful. Let’s have a look at the weekly chart. You can see that this green line is has been capping the prices during the whole year. As long as we haven’t seen the weekly close above this line, powers of the euro bulls will remain limited.
The ECB president Mario Draghi defended the policy of negative interest rates saying that its benefits outweigh its downsides. However, the market doesn’t expect dovish action from the European Central Bank in the near future as the regulator is facing a shortage of supply for its QE program. This lack of expectations should keep supporting the single currency.
EUR/USD can once again try to test higher levels around 1.1280 and 1.1350. Support for the pair is located at 1.1190 (100-day MA), 1.1150 (200-day MA), 1.1100 (50-week MA) and 1.1080 (2016 support line). Break below the latter will open the way down to 1.0970. At the same time, we should point out that both support and resistance for the pair look strong, so the pair may once again stay in the 1.1250/1.1100 range.
Draghi will speak once again next week on Monday. Also on Monday Germany will release Ifo business climate indicator. In the euro area’s economic calendar also watch German inflation on Wednesday and German retail sales and the euro area’s inflation on Friday.