- The US Dollar stays broadly strong, with the US currency rallying at times this week (and in fact over recent weeks) in both risk on and risk off scenarios.
- Risk off – The USD saw strength earlier this week on the Trump impeachment threat (although the greenback did lose ground versus the Japanese Yen)
- Risk on – But has also rallied in the past 24 hours on hints from Trump of a sooner than expected trade deal between the US and China.
- This has sent EURUSD lower through supports and keeps bother short- and intermediate-term risks lower.
EURUSD: Bear theme reinforced
A plunge Wednesday through 1.0964 after Tuesday’s rebound failure back from just below 1.1026 resistance (from 1.1024), to reinforce Monday’s selloff through our 1.0989/80 supports, to keep risks lower for Thursday.
The late August selloff through 1.1025 shifted the intermediate-term outlook to bearish, BUT risk is growing for an intermediate-term shift back to neutral above key 1.1164.
- We see a downside bias for 1.0938; break here quickly aims for 1.0926/24 and maybe 1.0901/1.0898.
- But above 1.0987 opens risk up towards 1.1026.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.0839 and 1.0578.
- What Changes This? Above 1.1165 shifts the intermediate-term outlook back to neutral; above 1.1250 is needed for an intermediate-term bull theme.
4 Hour EURUSD Chart