The remaining of the week presents a series of critical economic events and technical developments that could shape market movements. Key reports from Australia, Europe, the US, and the UK are anticipated to drive currency fluctuations, with employment data, retail sales figures, and interest rate decisions in focus. The European Central Bank is expected to cut rates further amid falling inflation and slowing growth, while in the US, retail sales and unemployment claims will provide insights into consumer strength and labor market trends. Alongside these fundamental drivers, technical analysis of the EURUSD highlights sustained downward momentum, with key resistance and support levels outlining potential market directions for traders.
Overview
The remaining of the week presents a series of critical economic events and technical developments that could shape market movements. Key reports from Australia, Europe, the US, and the UK are anticipated to drive currency fluctuations, with employment data, retail sales figures, and interest rate decisions in focus. The European Central Bank is expected to cut rates further amid falling inflation and slowing growth, while in the US, retail sales and unemployment claims will provide insights into consumer strength and labor market trends. Alongside these fundamental drivers, technical analysis of the EURUSD highlights sustained downward momentum, with key resistance and support levels outlining potential market directions for traders.
Key Economic Events
Thursday 03:30 am (GMT+3) - Australia: Employment Change (AUD)
Thursday 15:15 (GMT+3) - Europe: Main Refinancing Rate (EUR)
Thursday 15:30 (GMT+3) - USA: Retail Sales m/m (USD)
Thursday 15:30 (GMT+3) - USA: Unemployment Claims (USD)
Friday 09:00 am (GMT+3) - UK: Retail Sales (GBP)
Technical Analysis
Since reaching a high of 1.12134 on September 25, EURUSD has entered a sustained downtrend influenced by both technical and fundamental factors. Technically, the pair’s drop below the 50-period Exponential Moving Average (EMA) has reinforced bearish momentum, signaling the potential for further declines. A clear break below the key support level at 1.10020 has opened the door for additional downside movement. This is further supported by the Momentum oscillator falling below 100 and the Relative Strength Index (RSI) remaining under 50, both of which indicate continued selling pressure. These combined technical indicators suggest that EURUSD may face further downside risk in the near term.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
1.09434: The initial resistance is 1.09434, which aligns with the weekly Pivot Point (PP) calculated using the standard methodology.
1.10020: The second price target is identified at 1.10020, corresponding to the swing low marked on September 11.
1.10828: The third target is established at 1.10828, aligning with the weekly resistance R3 estimated using the standard Pivot Points methodology.
1.12134: An additional price target is noted at 1.12134, corresponding to the daily high reached on September 25.
Potential Downside Targets
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.07774: The first level of support is seen at 1.07774, representing the swing low from August 1.
1.06600: The second support level is identified at 1.06600, corresponding to the 261.8% Fibonacci Extension drawn from the swing low of 1.10020 to the swing high of 1.12134.
1.06010: The third support level is at 1.06010, reflecting a weekly low.
1.04480: An additional downward target is observed at 1.04480, mirroring a strong weekly support area.
Fundamentals
The European Central Bank (ECB) is expected to cut interest rates again on Thursday, reducing the benchmark rate to 3.25% as inflation across the eurozone drops to 1.8%, its lowest in over three years. This marks the third rate cut since June, with analysts anticipating another reduction in December. Slowing economic growth, with just 0.3% growth in the second quarter, reinforces the need for lower rates. The ECB raised rates sharply in response to inflation but now faces the challenge of balancing inflation control with economic growth.
Conclusion
In conclusion, the remainder of the week is packed with significant economic data releases and market events that are likely to drive volatility, particularly in the currency markets. Key indicators from Australia, Europe, the US, and the UK will provide valuable insights into employment, consumer strength, and central bank policies. With the European Central Bank expected to cut rates amidst slowing growth and easing inflation, the EURUSD continues its downward technical trend, so traders should closely monitor both fundamental and technical developments to identify potential opportunities in the coming days.