Euro Exchange Rate Today (29/10): EUR Dominance Eases, Is the Euro Now Overpriced?

There are concerns that the euro has overextended itself, this could go some way in explaining today's pullback:

"The RSI still stands in the overbought zone (91%); further correction is expected at the current levels. First level of support is placed at 1.3740 (Oct 23rd – post-NFP – low) then above 1.3700. Stops are seen below."

(Note: All quotes in this article are from the wholesale markets; your bank will subtract a discretionary spread from when passing on their retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering up to 5% more currency. Please learn more here.)

Shaun Osborne at TD Securities is one of those commentators who says euro rates are today looking rich:

"EUR/USD has lost some upward momentum over the past few days, but there are few important resistance levels to point to ahead of 1.40, and we haven’t seen any strong topping signals yet.  Fundamental the pair continues to look rich to us, and short term yield spreads continue to suggest EUR/USD would be more consistent at a level closer to 1.32/33."

While concerns continue to be expressed that the euro is overbought, many in the currency markets continue to argue that it would be foolish to go against the grain just yet.

"EUR-USD is expected to remain firm, trading mostly around 1.38, if US data disappoint. Charts now see some further upside potential towards 1.3850-1.39, which is likely to bode well for our 1M strangle," says a morning currency communique from UniCredit Bank.

Emmanuel Ng at OCBC Bank says he predicts the euro dollar exchange rate will remain rangebound in the near-term:

"Expect more range bound behavior from the pair given the caution ahead of the FOMC and an inherent suspicion of official EZ discomfort with the EUR’s recent gains.

"As noted previously, upside progress may be somewhat guarded with chatter of a technical fatigue and expect resistance towards 1.3835 and then 1.3850 while 1.3770 may provide initial support."