EURUSD around 1.1460 – EUR at Clear Risk of Further Declines
Aayush Jindal
Key Highlights
Euro after a nice ride against the US Dollar found resistance around 1.1460 and traded lower.
An important support trend line was cleared, which points that more declines are possible moving ahead.
New Zealand Westpac Consumer Confidence released by Westpac New Zealand declined from 113 to 106 in the third quarter of 2015.
EURUSD Technical AnalysisThe Euro climbed higher this past week against the US Dollar, and traded close to the 1.1460 level where it found sellers. There was a sharp downside reaction, which took the pair lower by more than 100 pips. Moreover, there was a bullish trend line formed on the hourly chart, which was breached to open the doors for more losses in the near term.There was another negative sign, as the EURUSD pair broke the 100 hourly simple moving average, but it found support near the 200 hourly SMA. The pair is currently correcting higher, but finding sellers near the 23.6% Fib retracement level of the last drop from the 1.1459 high to 1.1267 low.Moreover, if the pair traded further higher, then the broken trend line and the 100 hourly SMA could also stall gains in the short term. On the downside, a break below the 200 SMA is needed for a move towards 1.1220.New Zealand Westpac Consumer ConfidenceEarlier during the Asian session, the New Zealand Westpac Consumer Confidence, which is an indicator of the mood of consumers or business was released by Westpac New Zealand. The outcome was lower compared with the last reading of 113, as there was a decline to 106 in the third quarter of 2015. The most important point to note from the report was the fact that there is an expectation of more rate cuts in December, January and March. This might weigh on the NZDUSD pair moving ahead.Moreover, the report stated that “We’re sceptical that the lower New Zealand dollar will generate the sustained degree of inflation pressure that the RBNZ is forecasting. Rather, we think that the initial burst of inflation will be short-lived, and that further interest rate cuts will be needed to maintain inflation around the 2% target midpoint over the medium term“.There was a downside reaction noted in the NZDUSD pair towards 0.6360 during the Asian session.
There was another negative sign, as the EURUSD pair broke the 100 hourly simple moving average, but it found support near the 200 hourly SMA. The pair is currently correcting higher, but finding sellers near the 23.6% Fib retracement level of the last drop from the 1.1459 high to 1.1267 low.Moreover, if the pair traded further higher, then the broken trend line and the 100 hourly SMA could also stall gains in the short term. On the downside, a break below the 200 SMA is needed for a move towards 1.1220.New Zealand Westpac Consumer ConfidenceEarlier during the Asian session, the New Zealand Westpac Consumer Confidence, which is an indicator of the mood of consumers or business was released by Westpac New Zealand. The outcome was lower compared with the last reading of 113, as there was a decline to 106 in the third quarter of 2015. The most important point to note from the report was the fact that there is an expectation of more rate cuts in December, January and March. This might weigh on the NZDUSD pair moving ahead.Moreover, the report stated that “We’re sceptical that the lower New Zealand dollar will generate the sustained degree of inflation pressure that the RBNZ is forecasting. Rather, we think that the initial burst of inflation will be short-lived, and that further interest rate cuts will be needed to maintain inflation around the 2% target midpoint over the medium term“.There was a downside reaction noted in the NZDUSD pair towards 0.6360 during the Asian session.