EUR/USD Ends The Week Above 0.9800, Improving Short-Term Perspective
2022.10.24 02:53
[ad_1]
The pair edged higher on Friday and managed to close the week with gains above the 0.9800 level as the dollar retreated across the board alongside U.S. yields.
At the weekly close, the EUR/USD pair was trading at the 0.9860 zone, up 0.8% on the day and 1.4% higher in the week, posting the first weekly advance in three.
After hitting fresh cycle highs, U.S. yields pulled back on Friday as investors assessed the possibility the Federal Reserve might pivot policy following November’s meeting.
The rate on the note peaked at 4.335% before sliding to 4.22% by the end of the New York session. In the meantime, stocks rallied on Wall Street, with the main indexes gaining more than 2% on the day.
While a 75 bps rate hike by the Fed in November is fully priced in, there is some speculation the central bank might dial down the pace of tightening in the subsequent meetings. Still, for now, the WIRP tool point to a 57% probability of another 75 bps increase in December.
From a technical perspective, the EUR/USD pair’s short-term outlook has improved according to indicators on the daily chart, although the bigger picture remains tilted to the downside.
As the price advances above the 20-day SMA, technical indicators hold onto the positive ground. The RSI has a positive slope above its midline, while the MACD prints taller green bars, indicating increasing buying interest.
Next, resistance levels could be faced at the 0.9900 psychological level and the 0.9980 area, where the upper-side of a downward channel drawn from February highs stands.
On the flip side, the next support is seen at the 20-day SMA, around 0.9775, followed by the 0.9635 area and the 0.9550 zone.
[ad_2]
Source link
