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US Dollar Rallies Post Fed, Placing Downside Pressures on EURUSD

eurusd chart

  • The US Dollar posted a strong rally against most major currencies in the wake of a more hawkish tone from the FOMC on Wednesday 20th September.
  • This pushed EURUSD down towards key supports in the 1.1837/21 area, through which would see a Head & Shoulder top complete, and neutralise the bullish trend.
  • For the Euro STOXX 50, the pan-European benchmark average, the weakening of EURUSD is viewed as a positive, aiming for higher levels into latter September and beyond.

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EURUSD – Downside threat

An aggressive sell off Wednesday after the Fed Meeting, through support at 1.1913, easing upside pressures and shifting the risks for a further correction lower Thursday

Growing risk is now for a push below support at 1.1837 and 1.1821, through which would also see a break of Neckline support for a Head and Shoulders pattern, neutralising the intermediate term bullish theme.

For Today:

l We see a downside bias for 1.1860; break here aims for key levels at 1.1837 and 1.1821, maybe 1.1772.

l But above 1.1950/55 opens risk up to 1.2034.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 1.2000, 1.2173, maybe closer to 1.2600/02.

What Changes This? Below 1.1821 signals a neutral tone, only shifting negative below 1.1661.

 

4 Hour EURUSD Chart

eurusd chart

DJ Euro STOXX 50 – Intermediate-term bull shift and upside risks

Another new recovery high Wednesday after the Fed Meeting, sustaining upside forces from the September rally, aiming higher again for Thursday.

Furthermore, the push through 3534 sees the intermediate term view shift from neutral to bullish.

For Today:

l We see an upside bias through 3535; break here aims at 3559, maybe then 3577.

l But below 3507 opens risk down to 3489.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 3587.

l Above here targets 3622 and 3645.

What Changes This? Below 3439 signals a neutral tone, only shifting negative below 3373.

 

Daily Chart

euro stoxx future

 

 

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