The Euro Area released the inflation rate earlier today, and the result came out as expected at 9.1%, which did not influence the EURUSD exchange rate much. However, the Consumer Price Index came out better than expected at 117.85, slightly strengthening the EUR during the trading session.
The US announced Michigan Consumer Sentiment for September, and the figure came out slightly lower than expected at 59.5; the consensus was at 60. The USD lost some ground and is currently trading very close to parity.
The Federal Reserve Interest rate hike consensus is starting to increase, as the US inflation data showed that the inflationary pressures have not decreased significantly; experts say that the hike could go up to 100 basis points in next’s week Fed’s Interest Rate Decision.
FOMC Economic Projections will also be announced on Sept 21st; this will give market participants a good picture of where the US economy stands as the Fed is looking to slow down economic activity to control inflationary pressures.
The general trend continues to be downwards as the current price trades below the long-term moving average; if the price can break the $1.01164 resistance at our 50% Fibonacci retracement, we could see a trend reversal.
The Bollinger bands are shrinking, suggesting that the pair could enter a consolidation period around the $1.00 level; the pair is trading between the bands, indicating that the price is currently at a fair level.
The relative strength index is very neutral at 47%, allowing the pair to move in either direction for the short term before entering an overbought or oversold status. Our parabolic SAR indicator suggests that the price will fall in the upcoming sessions.
Our support level on the 23.6% Fibonacci retracement at $0.99832 could be tested in the new trading sessions and possibly fall after next week’s fundamental news releases.
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