EUR/USD Posted A Higher High And A Higher Low, But It's Still At Risk Of Falling

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

EUR/USD Current price: 1.1729

• Investors remained cautious despite setting aside Evergrande concerns.
• The focus shifts to the Fed Economic Projections and hints about tapering.
• EUR/USD posted a higher high and a higher low, but it’s still at risk of falling.

The EUR/USD pair peaked at 1.1748 on Tuesday, backed by receding demand for the US dollar. Market participants set aside Evergrande-related concerns and turned their eyes to the US Federal Reserve. The central bank started its two-day meeting and will announce its decision on Wednesday. The current monetary policy is widely anticipated to remain unchanged, with the focus on Economic Projections and hints about when and how the central bank will trim its massive stimulus programs. Analysts hope tapering to begin before year-end, although chances are low.

 On the data front, the EU had an empty macroeconomic calendar. On the other hand, the US has just published August Housing Starts, which rose 3.9% in the month and Building Permits up 6% in the same period. In addition, the Current Account posted a deficit of $-190.282 billion in the second quarter of the year.

Beyond the Fed, the macroeconomic calendar includes on Wednesday the preliminary estimate of EU Consumer Confidence, foreseen in September at -5 from -5.3 previously. The US will release MBA Mortgage Applications and Existing Home Sales.

EUR/USD short-term technical outlook

The EUR/USD pair trades in the 1.1720 price zone, pretty much unchanged for a second consecutive day. However, the daily chart shows that the pair posted a higher high and a higher low, a sign of increasing bullish interest, while still developing below the 61.8% retracement of its latest daily advance at 1.1755. The same chart shows that the pair remains below all of its moving averages, while the Momentum indicator maintains its bearish slope within negative levels, and the RSI indicator consolidates around 37.

In the 4-hour chart and for the near term, the risk remains skewed to the downside, as a firmly bearish 20 SMA once again attracted sellers. At the same time, technical indicators eased from intraday lows and turned flat within negative levels. The pair has room to retest the year low in the 1.1660 price zone on a break below 1.1700, while the bearish pressure will likely recede on an extension beyond 1.1755.

Support levels: 1.1700 1.1660 1.1620

Resistance levels: 1.1755 1.1780 1.1820

Image by 👀 Mabel Amber, who will one day from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.