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U.S. Dollar: Bullish Pressure

By Dmitriy GurkovskiyForexOct 18, 2021 08:22AM ET
www.investing.com/analysis/us-dollar-bullish-pressure-200605385
U.S. Dollar: Bullish Pressure
By Dmitriy Gurkovskiy   |  Oct 18, 2021 08:22AM ET
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The EUR/USD pair trades near 1.1575 at the time of writing, which could mean that the greenback has bullish momentum. Last Friday’s US retail sales data for September turned out to be more impressive than expected.

The indicator added 0.7% MoM after expanding by 0.9% MoM in August (revised upwards) against the expected reading of -0.2% MoM. In total, the indicator added 14.9% YoY July through September.

That’s an outstanding result. This will give the Fed a reason to begin tapering as early as November, as investors eagerly await an announcement regarding the same.

Technical Outlook

In the 4-hour chart, the EUR/USD pair has broken towards the downside after completing an ascending impulse at 1.1622, and a descending structure towards 1.1585.

The pair may continue the correction to reach 1.1545 before rebounding towards 1.1585, forming a new consolidation range between these two levels.

If the price breaks to the upside, the pair may break 1.1622 and continue to reach 1.1717. If it breaks to the downside, it could descend towards 1.1530 or 1.1450.

From the technical point of view, the MACD oscillator confirms this scenario. its signal line is steadily falling towards 0. I line expected to break this level and continue falling towards new lows.

EUR/USD 4-hour chart.
EUR/USD 4-hour chart.

As we can see in the 1-hour chart, after rebounding from 1.1616 to the downside, EUR/USD has continued the third correctional wave. The pair has already broken 1.1585 and may continue falling with the short-term target at 1.1555.

After that, the instrument may resume trading upwards to test 1.1585 and then start a new decline to complete the correction at 1.1545.

From the technical point of view, the Stochastic oscillator confirms this. Its signal line is moving below 20. Later, the line is expected to grow towards 50. A rebound from that line may lead to another decline towards 20.

EUR/USD 1-hour chart.
EUR/USD 1-hour chart.

U.S. Dollar: Bullish Pressure
 

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U.S. Dollar: Bullish Pressure

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