Wednesday, October 28, 2015

EUR/USD fails once again at 1.1050, European stocks rally

FXStreet (Mumbai) - The recent rally in EUR/USD stalled just ahead of hourly 50-SMA, with the major reverting to the red zone, as the European traders remain on the side-lines ahead of the Fed decision due later today.

EUR/USD faces stiff hurdle near daily pivot

The EUR/USD pair trades modestly flat at 1.1042, consolidating above the daily S1 seen at 1.1025. The main currency pair came under renewed selling pressure as the European stocks snapped previous losses and edged higher this session, thus bringing in a sudden shift in risk-sentiment. The DAX rallies 0.73% while the UK’s FTSE gains 0.26%. The pan-European benchmark, the Euro Stoxx 50 jumps 0.86%.

However, the major remains supported as the improving risk-sentiment keeps the US dollar undermined against its major competitors. The US dollar is now being treated as a risk-off currency amid fading prospects of a Fed rate rise this year and recent streak of weak US economic data.

Meanwhile, nothing of relevance in terms of economic news to be reported this session, attention now turns towards the FOMC decision for further momentum.

EUR/USD Technical Levels

The pair failed near 1.1050 levels and heads lower towards the immediate support located at 1.1002/00 (daily S1 + psychological levels) might be reached. Selling pressure will intensify below the last, dragging the pair towards 1.0956/59 (daily S2 + Aug 11 Low) and below that 1.0840 levels could be exposed. While to the upside, 1.1070/81 (Monday’s High + 200-DMA) appears immediate resistance, beyond which 1.1100 (round number) would be tested. A break above the last, 1.1154 (100-DMA) would come into the picture.
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