Euro Predicted to Come Under Fresh Pressure vs the Pound and US Dollar
- Written by: Rob Samson
-
"The selling in the EUR/USD accelerated after it broke below the key 1.2750 level which has served as support four times previously over the past year and a half," says analyst Boris Schlossberg at BK Asset Management alluding to the breaking of a key support level.
The sentiment towards the unit remains extremely negative as markets are beginning to appreciate the divergence between US and European monetary policies.
At the time of writing the following euro rates are noted:
- The euro to dollar conversion: 1 EUR = 1.2685, the exchange rate is 0.00 pct lower than seen at last night's close. (Markets closed).
- The euro to pound conversion: 1 EUR = 0.7803 GBP, the exchange rate is 0.00 pct lower.
- The euro to Australian dollar conversion: 1 EUR = 1.4484 AUD, the exchange rate is 0.00 pct lower.
Are you holding out for a better exchange rate? If so DON'T HESITATE - ensure your independent FX provider has the relevant buy order in place - when your rate is hit it is triggered and you don't miss out. Also ensure the relevant stop-loss is in place to ensure you don't get burnt by a sudden move in the opposite direction. Please learn more here.
What Matters for the Euro Dollar?
Looking ahead, the euro dollar exchange rate - and increasingly the euro pound exchange rate - remains highly dependent on data releases.
The data calendar will continue to thin out as we approach the end of the month.
Fresh volatility and the potential for major moves comes with the new month - analysts are already looking forward to the release of non-farm payrolls on the first Friday of October as it will likely set the tone for the key currency pair for weeks to come.
Until then we must keep a close eye on the charts as it is technical considerations that are most likely to bear relevance for the direction of the euro exchange rate complex.
Technical Outlook for the Euro vs Dollar
Analyst Luc Luyet at Swissquote Research gives us the following prediction for where the euro dollar may be headed next:
"EUR/USD continues to decline and is now testing the strong support area between 1.2755 and 1.2662. The short-term momentum is negative as long as prices remain below the hourly resistance at 1.2901 (23/09/2014 high).
"An initial resistance can be found at 1.2816 (22/09/2014 low).
"In the longer term, EUR/USD is in a succession of lower highs and lower lows since May 2014. The strong support area between 1.2755 (09/07/2013 low) and 1.2662 (13/11/2012 low) is challenged. An eventual break lower is expected. A resistance lies at 1.2995 (16/09/2014 high)."
Technical Outlook for the Euro vs the British Pound
Commenting on the euro to pound exchange rate (EUR/GBP), Luyet says:
"EUR/GBP remains weak despite Friday's daily hammer and is now challenging the support at 0.7810 (19/09/2014 low). Hourly resistances can
be found at 0.7889 (23/09/2014 high) and 0.7952 (intraday high).
"In the longer term, the underlying downtrend favours a test of the major support area between 0.7755 (23/07/2012 low) and 0.7694 (20/10/2008 low) at minimum. A decisive break of the resistance at 0.8034 (25/06/2014 high) is needed to suggest some exhaustion in the medium-term selling pressures."
