Breaking News
Get 45% Off 0
Investors lost 37% by missing this ONE signal 😵
Read now

EUR/USD: Double-Top Bearish Reversal in Play as 1.12 Resistance Holds Strong

By Investing.com (Damian Nowiszewski)ForexOct 01, 2024 17:25
ph.investing.com/analysis/eurusd-doubletop-bearish-reversal-in-play-as-112-resistance-holds-strong-206749
EUR/USD: Double-Top Bearish Reversal in Play as 1.12 Resistance Holds Strong
By Investing.com (Damian Nowiszewski)   |  Oct 01, 2024 17:25
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
EUR/USD
+0.03%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
  • The EUR/USD bounced off the resistance at 1.12 amid softening Eurozone inflation data.
  • Investors anticipate a pivotal US labor market report that could influence future direction.
  • A breakout from the current consolidation range may set the stage for new trading opportunities.
  • Looking for actionable trade ideas to navigate the current market volatility? Unlock access to InvestingPro’s AI-selected stock winners for under $9 a month!

The EUR/USD had been an upward trend following the Fed's interest rate cuts, but it has been struggling to break through the 1.12 resistance level.

That resistance level held firm once again, as the currency pair rebounded lower following the latest preliminary Eurozone data that signaled softer inflation.

The data from the Eurozone showed that the annual inflation inflation softened to 1.8% in September from 2.2%, weighing on the euro.

Eurozone CPI Data
Eurozone CPI Data

This rebound lower could be fueled further by shifting market expectations, with investors now favoring a 25-basis-point rate cut instead of a larger move.

Fed Monitor Tool
Fed Monitor Tool

The growing tensions along the Lebanon-Israel border have pushed investors toward safe-haven assets, benefiting the US dollar.

Looking ahead, the spotlight will shift to Friday’s US labor market report, a key driver of market sentiment and trading strategies for the EUR/USD pair.

Powell's Neutral Tone

In a speech yesterday at the National Association of Business Economists, Federal Reserve Chair Jerome Powell struck a neutral tone, reinforcing that rate cuts will continue but without a set path.

While his comments were not groundbreaking, market expectations have adjusted, betting on a smaller scale of cuts, leaving room for a dovish surprise in November.

Meanwhile, the European Central Bank (ECB) is expected to follow a similar course, likely cutting rates by another 25 basis points at its next meeting.

Focus Shifts to US Labor Market Data

With recent US labor market reports having significantly influenced both stocks and the US dollar, Friday’s data release is highly anticipated.

Forecasts suggest little change, with a slight uptick unemployment and non-farm payroll growth expected.

US Labor Market Data
US Labor Market Data

Investors will also be watching earlier reports on the ISM Manufacturing and Services Index, which are expected to show minimal deviation from the expected figure. Until the labor data hits, the market may remain directionless.

EUR/USD Faces Double-Top

The EUR/USD pair has been in a sideways consolidation after failing to break through the 1.12 resistance, which corresponds with the double-top formation.

This pattern typically signals a bearish reversal. The key support level is at 1.11.

A breakdown below 1.11 could extend the correction to 1.10, while a northward move remains possible if the data stays in line with forecasts, opening the door for another attempt at 1.12.

EUR/USD Price Chart
EUR/USD Price Chart

A decisive breakout from the 1.11-1.12 range will likely set the next direction, potentially following Friday’s data release.

***

Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk is at the investor's own risk. We also do not provide any investment advisory services.

EUR/USD: Double-Top Bearish Reversal in Play as 1.12 Resistance Holds Strong
 

Related Articles

EUR/USD: Double-Top Bearish Reversal in Play as 1.12 Resistance Holds Strong

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Apple
Continue with Google
or
Sign up with Email