(
MENAFN- Daily Forex) Bearish view
Sell the EUR/USD pair and set a take-profit at 1.0900 (200 EMA). Add a stop-loss at 1.1140. Timeline: 1-2 days.
Bullish view
Set a buy-stop at 1.1050 and a take-profit at 1.1140. Add a stop-loss at 1.0950.
The EUR/USD
exchange rate retreated for four consecutive days, reaching its lowest point since September 12 as the US dollar comeback continued. It retreated to a low of 1.1038, much lower than last week's high of 1.1215.
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The EUR/USD pair has fallen sharply because of the ongoing geopolitical issues and rising odds that the Fed will be gradual when cutting interest rates.
The biggest geopolitical issue is in the Middle East, where Israel is considering its response for Iran, which launched hundreds of missiles on Tuesday.
Analysts expect Israel to attack some of Iran's key infrastructure, including its oil terminals, which could lead to higher energy prices. Brent, the global benchmark, rose to $75 from last month's low of $69.
The EUR/USD pair also retreated after more Federal Reserve officials warned on the rising market expectations of interest rate cuts. In a statement earlier this week, Jerome Powell said that the bank would be gradual when it comes to rate cuts. Other officials, including Tom Barkin and Raphael Bostic reiterated this view.
Data released this week showed that the labor market is doing modestly well. The number of job openings jumped to over 8 million in August. Another report by ADP showed that the number of private payrolls increased by 143k in September, higher than the median estimate of 124k.
These numbers came two days before the Bureau of Labor Statistics (BLS) publishes the official jobs numbers. In the last meetings, the Fed has noted that it was more concerned about the labor market instead of inflation.
The next important economic data to watch will be the US and European services and composite PMI data. The services sector has done better than the manufacturing industry in the past few months/USD Technical Analysis
The EUR/USD exchange rate has pulled back sharply in the past few days. This retreat happened after forming a double-top chart pattern at 1.1214. It has now retreated below the core support at 1.1140, its highest point in December last year. It is also approaching the double-top's neckline at 1.100.
The MACD and the Relative Strength Index (RSI) have all pointed downwards. Therefore, the path of the least resistance is downwards, with the next target to watch being the 200-day moving average at 1.0900. The stop-loss of this trade is at 1.1140.
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