EURUSD technical analysis for the month of September
The medium-term uptrend in the EURUSD pair has been breached by the sharp fall of the price on 23 June 2016.After hitting a low of 1.09132 prices has correct towards the level 1.13648 level. The EURUSD pair has been suffering from indecision since both the currencies is facing hardship in their economic performance. The fast recovery of the pair has been triggered by the recent bad data of US unemployment claim and average hourly income. Investors are waiting patiently for the FOMC meeting minute since there is 20% chance of interest rate hike in the month of September. The FED was strongly determined with the interest rate hike decision in the upcoming FOMC meeting minutes but bad data has significantly lowered down the probability of hawkish statement in the FOMC meeting minutes. Professionally trained traders are cautiously waiting for the inflation rate adjustment since it might provide them some clue regarding the FED decision about their rate hike. If the rate hike is postponed in the month of September then traders will find it difficult to trade the major’s pair. To be precise the whole world economy is currently unstable and waiting for the FED decision in the upcoming FOMC meeting minutes.
EURUSD daily chart analysis
Figure: Broken trend line in the daily chart on EURUSD pair
The EURUSD pair has formed a nice ascending structure after hitting an initial bottom of1.0520 and rallied upward for more than 1000 pips. The rallied was limited by the critical resistance situated at 1.1620 levels where the price was forced down to the rising trend line. During the Brexit news, the EURUSD pair breached the bullish trend line with a strong downward momentum. The momentum was faded out by the weakness of the US dollar which results in the price correction towards the broken trend line. Currently, the price is heading towards the trend line resistance again from where we can find some fresh seller again. Before going short on this pair at the trend line resistance, price action confirmation signal should be used to limit the potential risk. On the contrary, if the pair manages to breach above the trend line resistance at 1.14000 levels than we can expect another strong upward rally towards the 1.16000 level. But the recent burning issue of the FED has created a mass confusion into the mind of investors about the next possible price action scenario of the pair. Fundamentally the US dollar is still pretty weak which suggest the upward momentum of the price towards the trend line resistance. But the inflation rate adjustment is in the mid of September which is creating the fear into the mind of buyers to go against the US dollar at this moment. To be precise the market has more room in the direction of the upward move currently rather than southwards.
Weekly chart analysis in the EURUSD pair
Figure: Triangle structure formation in the weekly chart of the EURUSD pair
The EURUSD pair has formed a nice triangle structure in the weekly chart. Currently, the price has a narrow zone to trade with. Professional price action traders are staying away from the market until the market breaks the triangle resistance or support zone. The weekly chart suggests a side way movement in the price ranging from 1.1270 levels to 1.1356 levels. If the pair manages to breach the 1.1356 level with bullish daily closing than we can expect another rise in the pair towards 1.1500 levels. The bullish trend is more prominent in the market until the market breaches the minor support at 1.1067 levels. A daily closing below that level will bring the long-term bearish trend again in action. The initial bearish target of the pair would be the low of 29th November 2011.A significant amount of support would be there which might again drive the price up from that level.
The initial topping off the pair is formed at 1.1535 levels on the daily chart which suggest that the bullish correction of the pair is complete. The fact is further intensified with the breaching of the daily trend line. Before that 1.1460 levels is going to play key reversal zone for the pair which is the multi-year low of the EURUSD pair. The recent German CPI also suggests that the EURO is again ready to slip southward due to the major economic crisis in the world. But luckily the southward move of the pair was delayed due to the weak economy of the US. Technically the pair has very limited room in the upward direction in the longer time and it needs to overcome much critical resistance level before establishing a new bullish trend in the market. Trained professional are waiting patiently to sell this pair at a higher price and looking to make more than 1000 pips in the downward directions.
Summary: Considering the technical and fundamental parameters the EURO is still pretty weak and yet not ready to climb higher. The recent bullish run in the EURUSD pair was intensified by the weak US dollar which is most likely to recover in the upcoming days. The interest rate decision in upcoming FOMC meeting minute is going to play a vital role in the next move in the EURSD pair. Price action traders are firmly bearish on this pair and looking for a suitable trading opportunity for short. Until and unless the market finds a way to climb towards the 1.17000 critical resistance level, bearish move from the pair is expected strongly. On the contrary, if the pair manages to breach the high of 23rd august then we can see a strong bullish move from this pair followed by bullish trend reversal.