EURUSD is likely to test the critical key level support for the second time

The overall trend for EURUSD remains bearish, currently undergoing a corrective phase with an anticipated test of the key support level at 1.0635-1.0642. However, multiple tests of this support may weaken its effectiveness. Conversely, the key resistance level stands at 1.0754-1.0764. The upcoming week is poised to bring heightened volatility, especially for USD-denominated pairs, owing to the impending FOMC meeting and interest rate decision. Additionally, Tuesday will see the release of EU CPI and Core CPI data, with economists predicting stability in CPI but a decline in Core CPI. This mixed outlook suggests that EURUSD may tread sideways from Monday to Wednesday ahead of the FOMC release.

Multiple factors contribute to the bearish overall trend of EURUSD:

• The EMA 50 resides below the EMA 200.

• On September 14, 2023, the RSI dipped below the critical 30 threshold.

• The MACD signal line remains situated below the zero line.

Following a substantial bearish move on September 14, 2023, EURUSD has entered a corrective phase aimed at establishing a fresh lower high. This short-term resistance level is likely to materialize within the range of 1.0687 to 1.0704.

Key economic indicator to watch this week

Monday, September 18, 2023

EU, ECB members speak

Tuesday, September 19, 2023

EU, Core CPI

Forecast: 5.3%

Previous: 5.5%

EU, CPI

Forecast: 5.3%

Previous: 5.5%

US, Building permits

Forecast: 1.440M

Previous: 1.443M

US, House starts

Forecast: 1.440M

Previous: 1.452M

Wednesday, September 20, 2023

EU, ECB members speak

US, FOMC

US, FED Interest

Forecast: 5.50%

Previous: 5.50%

Thursday, September 21, 2023

US, initial jobless claim

Forecast: 225K

Previous: 220K

US, Philadelphia Fed Manufacturing Index

Forecast: -1.0

Previous: 12.0

US, Existing home sales

Forecast: 4.10M

Previous: 4.07M

Friday, September 22, 2023

EU, HCOB Services PMI

Forecast: 47.5

Previous: 47.9

EU, HCOB Manufacturing PMI

Forecast: 44.0

Previous: 43.5

EU, HCOB composite PMI

Forecast: 46.3

Previous: 46.7

EU, ECB members speak

US, S&P Global US Manufacturing PMI

Forecast: 47.9

Previous: 47.9

US, S&P Global US Services PMI

Forecast: 50.3

Previous: 50.5

US, S&P Global US Composite PMI

Previous: 50.2

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