Last week, the greenback plunged to its lowest level since January 2015, with the Euro and Canadian dollar notching multiyear highs. EURUSD is trading around 1.1960, gain insights on this major pair with OctaFX’s 12 September EURUSD technical analysis.
12 September, OctaFX – After a quiet start to the week, investors will turn their attention back to the economic data on Tuesday with key inflation numbers from the United Kingdom. National Statistics in London will get the ball rolling at 08:30 GMT with a batch of inflation data covering the retail, consumer and producer levels.
The Retail Price Index is expected to show annual growth of 3.8% in August, compared with 3.6% the previous month. The Producer Price Index (PPI) Output will likely show a reading of 3.1% for the same month. The annual Consumer Price Index (CPI) likely rose to 2.8% in August from 2.6% the previous month.
12 September EURUSD technical analysis
The single currency continues to correct lower against the greenback. The EURUSD pair moved below its 100-hour moving average, and reached an intraday low of 1.1945, during the Asian trading session. Price-action on the EURUSD suggests further intraday weakness remains possible. Will sellers likely to target the euro’s monthly time frame, 50-period moving average, located at 1.1871.
The EURUSD remains bearish on an intraday basis whilst trading below the pairs weekly pivot point, at 1.1999. Only a higher time-frame price close below the 1.1660 level can negate the euro’s bullish medium-term outlook. Key intraday technical support is located at the 200-hour moving average. At 1.1938, and the September 7th price low, at 1.1914.
To the upside, key intraday technical resistance for the EURUSD pair is located at 1.1962, 1.1979 and 1.1999. Above the 1.1999 level, further resistance is found at the former swing price high at 1.3039.
The Bank of England (BOE) has already warned investors that inflation will probably overshoot its target in the short-term as ultra-loose monetary policy compensates for Brexit. Negotiations over the future of UK-EU relations officially began in June following the snap parliamentary election. The election result weakened Prime Minister Theresa May’s mandate for a ‘hard Brexit’ after the Conservatives failed to regain a parliamentary majority.
The British pound traded within a narrow range on Tuesday, although pressure is building back toward the 1.3200 US handle. Cable last reached that milestone in early August before engaging in a multiweek correction. The 1.3200 level is the immediate resistance for the GBPUSD. A clean break above that level would lead to a test of the 1.3220 region. On the opposite side of the ledger, the 1.3150 area offers immediate support, with further downside projected at around 1.3100.
A stronger US dollar triggered a sharp downward correction for precious metals on Monday, with gold and silver prices finishing lower on the day. Spot prices fell nearly $20 and were down again on Tuesday. Prices are currently hovering near two-week lows. The outlook on bullion will depend largely on fundamental forces. In terms of short-term momentum, the RSI and MACD show weak underlying momentum.
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