The EURUSD resumed the downtrend today amid a firmer dollar across board, further dampening the outlook for the EURUSD. The USD has recorded mild gains on the day across the major, minor and some exotic currencies today. The Euro is yet to recover from Monday’s poor purchasing managers’ index data, which painted a grim outlook for the EURUSD and the Eurozone in general. Data of the German business sentiment released on Tuesday also revealed deteriorating outlook for economic conditions in the Eurozone.
Near-term Outlook for EURUSD
The short-term Fibonacci retracement trace from the swing high of September 13 to the swing low of September 23 identifies near-term support and resistance areas.
The EURUSD is trading 0.32% lower at 1.09856, after hitting an intraday low of 1.09765. The weekly low is at the 1.09645 mark, which is where the EURUSD is expected to target next. Below this area, further support is seen at 1.0927 (Sep 3 and 12 lows). A downside break of Monday’s low maks this the next viable target.
On the flip side, an upside break of the 23.6% Fibonacci level of 1.09978 (Sep 23 high) will allow price action to target 1.10234 (Sep 24 high at the 38.2% Fibonacci price level). A break above this level will invalidate the short-term downtrend expectation.