FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that the American dollar edged sharply higher across the board this Monday, with a shy advance at the beginning of the day becoming a strong recovery that erased all of its post-FED's losses.
Key Quotes:
"There was no particular piece of data that triggered the move, although during the weekend and also this Monday, several FED officers talked about last week hike having been a "close call." In Europe, on the other hand, market talks point for the need of additional QE, should the global economic slowdown continue. US stocks opened strongly up, which helped the greenback to advance, even despite US Existing Home sales fell 4.8% in August, after three straight months of gains. Mid American afternoon, stocks reversed course, but the greenback held into gains.
The EUR/USD pair broke below the 1.1200 level and set a daily low at 1.1180, finding short term selling interest on recoveries towards the 1.1210/20 region. Closing at its lowest in over a week, the short term picture supports additional declines for the upcoming hours, as in the 1 hour chart, the 20 SMA heads sharply lower after breaking below its 100 and 200 SMAs, whilst the technical indicators consolidate in oversold territory, with no signs of changing bias.
In the 4 hours chart, and early attempt to advance was contained by the 20 SMA, in the 1.1330 region, whilst the technical indicators have lost their downward strength, but remain below their mid-lines, also far from suggesting an up-turn. Should the price extend beyond 1.1160, the bearish momentum will likely accelerate, eyeing then 1.1050 as the next probable bearish target for the upcoming sessions."
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