Euro Retreats from Highs but Momentum Turns Positive


The EUR/USD exchange rate has been trading on the defensive early on Monday on general dollar strength dipping to the 1.1320 area, down moderately from the three-week high seen in the Asia session at 1.1359. Markets are treading cautiously ahead of Thursday’s Fed announcement, in which the U.S. central bank could alter monetary policy with an interest rate hike for the first time in 9-years.

European stocks and U.S. equity index futures are showing modest gains, unperturbed by the latest rollercoaster rise in China markets. Eurozone industrial production beat expectations, but has cast little impact on the euro. EUR/USD remains some 2% up on early September lows, since when the pair has broken above its 200-day moving average, presently at 1.1240, with the two daily closes above here having encouraged bullish commentaries from technical analysts. Support comes in at 1.1240 which coincides with the 200-day moving average, and is resistance at 1.1360-64 which encompasses the Aug-27 high.

Momentum on the currency pair has turned positive as the MACD (moving average convergence divergence) index generated a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.

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Source:: Euro Retreats from Highs but Momentum Turns Positive

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