Wednesday, October 7, 2015

EUR/USD: headed into overbought territory - FXStreet

FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained and noted that the American dollar took a dive early in the US session, as commodities extended their latest advances, with gold approaching $1,150 a troy ounce and WTI surging above $47.0 a barrel.

Key Quotes:

"US indexes also opened broadly higher, but gave up most of its intraday gains ahead of the close."

"The EUR/USD pair traded in quite a limited range during the first half of the day, hovering around the 1.1200 and lacking directional strength, as no clues came from European stocks, which traded range bound during the European morning."

"The macroeconomic calendar was light, with Germany factory orders, down 1.8% in August compared to July, and the US trade balance deficit that widened to $48.3B in the same month, the largest expansion in US deficit in five months. The news boosted local share markets as sagging exports should put additional pressure on a FED's possible rate hike."

"The EUR/USD pair surged to a daily high of 1.1274, trading within Monday's range and still confined in a daily triangle. Short term, the upward momentum is fading in the 1 hour chart, as despite the price is well above its moving averages, the technical indicators are beginning to show signs of exhaustion near overbought territory."

"In the 4 hours chart, the 20 SMA is now aiming higher around 1.1200, whilst the Momentum indicator turned south and is crossing now below its 100 level, whilst the RSI indicator stands flat around 58, all of which limits chances of additional gains, during the upcoming hours."

"Additionally, the price is getting too close to the vortex of the figure, and it will be invalidate if it's not broken during the next couple of days. For this Wednesday, the roof of the figure is set at 1.1285, whilst the base stands now at 1.1160."
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