The EURUSD has pushed to new session lows, extending its move away from the broken 200-bar moving average on the 4-hour chart at 1.17025. The drop was driven by stronger-than-expected U.S. data today, with initial claims, GDP, existing home sales, and durable goods orders all coming in firmer. U.S. yields reacted accordingly, with the 10-year yield now up 5 basis points at 4.196%, after dipping as low as 3.99% in the aftermath of the Fed’s September 17 decision.
Technically, buyers had attempted to regain control earlier in the day by pushing back above the 100-bar moving average on the 4-hour chart at 1.17446, reaching a high of 1.1753. However, momentum faded, and sellers regained control. The break below the 38.2% retracement of the move up from the August 1 low at 1.1717 marked the first downside target. That was followed by a test and break of the 200-bar MA at 1.17025.
The next key target is the 50% midpoint of the August 1 rally at 1.16549, which also aligns with the September 11 low at 1.1658. A decisive move below those levels would open the door toward the swing area between 1.1610 and 1.1630, with the bigger prize being the rising 100-day moving average near 1.1590 (and moving higher – see the lower blue line).
For now, sellers are asserting themselves below the key moving averages, and the technical roadmap is pointing lower. With U.S. fundamentals turning in favor of the dollar just as markets had begun to price in Fed easing, the balance of risks has shifted firmly toward more downside pressure in EURUSD.
