The pair set five month-highs on Monday, but saw a volatile session as markets contemplated the Fed's tightening path and ended the day with losses. The US central bank may have hinted at smaller rate hikes ahead, but hawkish commentary propped up the greenback.
EUR/USD once again faltered at 1.0500, while the Relative Strength Index (RSI) did not follow the price action higher. The rejection and the RSI divergence could lead to further weakness and a breach of 1.0199-50, although sub-parity moves would need a strong catalyst.
On the other hand, EUR/USD is upbeat today and heads towards its best month of the year. The higher highs keep it in on track to 1.0609, although further advance towards and beyond 1.0787 does not look easy in the near-term.
The current week contains many economic releases that can cause volatility and determine the pair's path. These include inflation updates from the US and Eurozone, the US Jobs report and speech by Fed-Chair Powell.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.