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Baxia Markets
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October 12, 2022

EURUSD could resume downtrend

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The United States will release the Producer Price Index for September, which measures price changes in consumer goods and services from a seller's perspective; this economic indicator is a great way to gauge inflation. Analysts expect PPI MoM to increase from a previous -.01% to 0.2% this month. A higher figure will benefit the USD as it shows solid economic activity.

 

The FOMC will release Minutes later in the day, which will likely significantly impact the USD exchange rate against other currencies, particularly other major forex pairs. The minutes provide a summary of the discussions during the FOMC Meetings. This announcement will give market participants a good gauge of the future Fed's plans regarding monetary policy.

 

Later in the day, the Euro Area will release Industrial Production MoM; the expert consensus suggests that the figure will improve from -2.3% to 0.6%; a higher-than-expected result will benefit the EURUSD.

 

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The EURUSD broke a four-day losing streak in the previous trading session; the pair recovered some of the ground it lost last week. The general trend continues to be downwards as the price is trading below the short and long-term moving averages.

 

The pair is finding resistance on our 50% Fibonacci retracement at $0.97678; this is an important level as a breakout confirmation will represent a potential trend reversal. However, there is another strong resistance on our 38.2% Retracement at $0.98225.

 

The relative strength index is at 44%, allowing the pair to move in either direction before entering an oversold or overbought status. Our parabolic SAR indicator suggests that the price will continue to move upwards in the short term.

 

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forex, fundamental analysis

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