The Euro returns to red on Friday and extends below 0.98 handle, to hit new 20-year low after bears paused previous day, due to Japan’s intervention in FX market to support yen that temporarily deflated the dollar.
Thursday’s action ended in Doji candle with long upper shadow, which signaled that the upside remains well protected and bearish pressure persists.
Strong dollar and darkened economic outlook for the Eurozone weigh on the single currency, along with signals that the Fed remains on track for further large rate hikes.
Daily studies in full bearish setup add to negative stance, as the pair focuses net target at 0.9607 (Sep 2002 low).
Former low at 0.9864 (Sep 6) reverted to initial resistance, followed by 0.9900 and falling 10/20DMA’s (0.9953/0.9968 respectively) which also created a bear-cross and add to bearish structure.
Today’s key events will be releases of PMI figures from Germany and EU, with forecasts showing lower levels in September compared to previous month in both sectors and the numbers remaining well below 50 threshold which divides growth from contraction that adds to Euro’s negative near-term outlook
Res: 0.9851; 0.9864; 0.9900; 0.9953.
Sup: 0.9769; 0.9736; 0.9700; 0.9657.