The Euro appreciated due to risk factor improvements during the previous month. The ECB has signalled its intention to remain accommodative for as long as it is needed which is one more factor to help Euro to appreciate. In contrast, markets expect two more rate cuts next year. The US Dollar remains overvalued compared to the Purchase Power Parity of around 1.2900. Interest rate differentials against the euro declined during the last 6 months.
The EUR/USD still below from the fair value, but the possibility to appreciate is very likely. The first Resistance is found at the 1.1113 and 1.1217 respectively. A break above the 1.1217 could possibly push the pair as high as 1.1347. In contrast, the first support is found at 1.0955 and 1.0776 respectively. If the price breaks below the 1.0776 level, it could possibly force the pair as low as 1.0485. The RSI (W) remains at the neutral to positive level and the CCI (W) remains at the neutral territory.
Source: Exclusive Capital
What Is Relative Strength Index – RSI?
The relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100.
What is the Commodity Channel Index (CCI)?
Developed by Donald Lambert, the Commodity Channel Index (CCI) is a momentum-based oscillator used to help determine when an investment vehicle is reaching a condition of being overbought or oversold. It is also used to assess price trend direction and strength. This information allows traders to determine if they want to enter or exit a trade, refrain from taking a trade, or add to an existing position. In this way, the indicator can be used to provide trade signals when it acts in a certain way.
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