Battle for the bulls and the bears for control of EURUSD

3 окт. 2018 г.

EURUSD Technical Overview:

Pivot: 1.1538 (CMP 1.1573)

Key Support: 1.1555 - 1.1532 - 1.1510 - 1.1490

Key Resistance: 1.1588 - 1.1612 - 1.1628 - 1.1645

Day Trading Range: 1.1628 - 1.1490

Technical Indicator:

Moving Average: SMA 50 (1.1566) strong support & SMA 100 (1.1603) strong resistance for the day.

RSI: The indicator shows bullish divergence for the day.

Technical Trade View:

Most Likely Scenario: long positions above 1.1538 with targets at 1.1610 & 1.1645 in extension.

Alternative scenario: below 1.1538 look for further downside with 1.1510 & 1.1488 as targets.

Fundamental:

After bottoming out in the boundaries of the 1.15000 neighborhood in the first half of the week, the pair seems to have recovered some attention and is now up around a cent since those lows.

However, Italian politics remains a hot topic for the time being, with the budget deficit still in centre stage. It is worth mentioning that the official budget submission to the EU will be on October 15.

In addition, some renewed weakness around the greenback is also bolstering the corrective up move in the pair.

Looking ahead, final September Services PMIs in Euroland is due next seconded by EMU’s Retail Sales. Across the pond, the labour market will come to the fore in light of the release of the ADP report, while the key ISM Non-manufacturing will also grab attention.

Italian Prime Minister Giuseppe Conte has called a budget meeting with his ministers to go over Italy's budget discussions further, as holiday-impinged markets tread on the volatile side on reaction to Euro-centric headlines.

Key highlights

Conte will be meeting with select members of his cabinet as they look for more ways to squeeze some wiggle room out of the European nation's books, with headlines on Tuesday sending the EUR lower after Italy decided to stick to their guns and plan for a 2.4% budget deficit in fiscal year 2019, bringing Italy's budget deficit beyond the 2% target set out under EU guidelines.

Conte and his posse have attempted to smooth over frictions in markets regarding Italy's budget, promising to reduce Italy's deficit to 2.2% in fiscal year 2020 and dropping it further to the 2.0% barrier by FY 2021, but these proposals lie several years down the road, and traders will be keeping a close eye on the Italian bond yields this week, bearing in mind that the previous government was targeting a deficit of just 0.6% in 2019.

The region around 1.15 is likely to be the key and this would be the region of battle for the bulls and the bears for control of this pair and there is likely to be a lot of stops below this. Any break below this region would trigger these stops and would accelerate the move lower and then the bears would be in control.

Thanks
YoCryptoManic