EUR/USD Weakens Amid Global Economic Uncertainty And Strong US Dollar

The EUR/USD pair started this week at approximately 1.0789, a position influenced by increasing global economic uncertainty and a stronger preference for safe-haven assets. The strength of the US dollar is being supported by various factors including rising yields on US government bonds and positive consumer confidence data. For instance, the University of Michigan reported an increase in its consumer confidence index to 70.5 points in October, exceeding market expectations.

This weekend, during Japan's general election, the appeal of the US dollar as a safe-haven currency was particularly noticeable. This reflects the currency's reliable status during times of political and economic instability.

Looking forward, this week will be significant for the EUR/USD pair as key labor market data from the US is expected to be released. These figures are critical as they might influence the Federal Reserve's careful approach to adjusting interest rates. Market speculation currently anticipates two potential rate cuts by the end of the year, each by 25 basis points. However, the upcoming employment data could adjust these expectations, which in turn may affect the direction of the EUR/USD pair.

Technical Analysis of EUR/USD

In terms of technical analysis, the H4 chart shows that the EUR/USD completed an upward movement reaching 1.0838 and is now in a corrective phase towards 1.0780. If this correction concludes successfully, we can expect a new growth wave targeting 1.0850, which could lead to the development of a consolidation range around this level. A breakout above this range might extend the upward trend towards 1.0944. The MACD indicator supports this positive outlook, as its signal line remains below zero but is trending upward, indicating a potential shift in momentum.

On the H1 chart, the EUR/USD has reinforced its upward movement to 1.0838 and is currently correcting towards 1.0780. Upon reaching this corrective target, another upward movement is expected towards 1.0815, with potential further progress to 1.0850. This prediction is reinforced by the Stochastic oscillator, which shows its signal line rising from below 20 towards 80, suggesting further upward price activity is likely.

Disclaimer: This analysis represents the author's opinion and should not be considered as trading advice. The authors bear no responsibility for any trading results based on the recommendations and reviews contained herein.

EUR/USD, Dollar, Analysis