Euro/Dollar Tests Key Trendline Resistance
The dollar gave back some ground on Friday, mostly on month-end profit taking, but closed the month with gains after the US Federal Reserve surprised the market with a hawkish statement and opening doors for a December rate hike.
In Europe, October annual inflation met expectations of 0.0% against previous -0.1%, whilst the US Consumer Sentiment missed expectations, resulting at 90.0, and below a preliminary reading of 92.1, while Personal Income and Spending, both grew at the slowest pace since January in September, up by 0.1% each.
The EUR/USD pair advanced up to 1.1072 but the rally was quickly faded, reflecting a strong negative sentiment towards the common currency. Having closed the week barely above the 1.1000 figure, the dominant bearish trend remains firm in place, given that the daily chart shows that selling interest surged on an approach to the 200 DMA, whilst the Momentum indicator maintains a strong bearish, despite being in oversold territory.
In the same chart, the RSI indicator has managed to bounce from oversold levels, but remains well into negative territory, leaving room for additional declines. In the 4 hours chart, the pair is struggling around a bearish 20 SMA, whilst the technical indicators have failed to advance above their mid-lines, but lack enough bearish strength to confirm a bearish movement ahead.
Support levels: 1.0960 1.0920 1.0880
Resistance levels: 1.1050 1.1090 1.1125