The EURUSD currency pair, trading at 1.06568, failed to continue its upward movement after experiencing resistance from Lagarde’s actions.

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• The EUR/USD couldn’t extend recovery motivation after getting knocked back by Lagarde.

The pair currently trades last at 1.06568.

The previous day high was 1.0752 while the previous day low was 1.0632. The daily 38.2% Fib levels comes at 1.0678, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0706, expected to provide resistance.

The EUR/USD is set to close out Friday’s trading on the back foot, testing the week’s lows near 1.0650 as the US Dollar (USD) catches a late-week bid, sending the broad dollar index higher.

The European Central Bank (ECB) managed to swing a dovish rate call that saw the central bank raising their benchmark interest rates 25 basis points to bring the overnight deposit rate to 4%. Despite the rate hike, markets lurched and the Euro (EUR) slumped on the news as the ECB effectively announced the end of the current rate hike cycle without directly saying it.

While the ECB has left the door open for possible rate hikes in the future, ECB President Christine Lagarde poured cold water over the Euro, declaring that the ECB has shifted to determining how long rates should remain at current levels instead of how much they should change.

Expectations of further rate hikes from the ECB have entirely evaporated in markets and investors are now anticipating the first rate cut to come from the European Union’s central bank in March of next year.

On the US side, the economic calendar did not disappoint, sending the Greenback (USD) higher at regular intervals as US data continues to surprise to the upside.

US retail sales figures for August beat expectations, printing at 0.6% against the forecast 0.2%, and climbing over the revised-upwards previous figure of 0.5%. The US economy appears to be healthy, and is shrugging off concerns of an impending recession. The “soft landing” narrative that has undershot markets recently appears to be receding as the US consumer segment appears to be in a healthy position.

Next week sees EU inflation figures due on Tuesday, with the Harmonized Index of Consumer Prices (CPI) for August forecast to print in-line with the previous period. Pan-European inflation last came in at 0.3%, and investors are expecting a repeat showing. Inflation still remains a stubborn concern, and an excessive beat on the headline could see investors scurrying for safety.

On the US side it’s another ‘all eyes on the Federal Reserve (Fed)’ week, with the Fed’s Federal Open Market Committee broadly expected to keep the US benchmark interest rate steady at 5.5%, though inflation concerns sees markets still bracing for further hikes into the end of the year.

Thursday will also see US jobless claims and Friday will deliver preliminary EU manufacturing and services Purchasing Manager Indexes (PMI), followed by the US iteration of the same data publication later in the day.

The Euro is set to close in the red for the ninth consecutive week, trading into four-month lows just north of the 1.0650 handle. Friday saw some bullish recovery for the Euro before broader US Dollar flows sent the pair back towards the day’s opening prices.

Daily candlesticks have drifted below the 200-day Simple Moving Average (SMA), and bidders will be keeping an eye on the 14-day Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) histogram indicators, both of which are flashing oversold conditions.

The 34-day Exponential Moving Average (EMA) is poised to confirm a bearish cross of the 200-day SMA just below 1.0850, and a series of lower highs sees the EUR/USD using the bearish-leaning 34-EMA as descending resistance further down the charts.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0659 at the time of writing. Pair opened at 1.0643 and is trading with a change of 0.15 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.0792, 50 SMA 1.0937, 100 SMA @ 1.0898 and 200 SMA @ 1.0828.

The previous day high was 1.0752 while the previous day low was 1.0632. The daily 38.2% Fib levels comes at 1.0678, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0706, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0599, 1.0555, 1.0479
• Pivot resistance is noted at 1.072, 1.0796, 1.084

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