EUR USD

EUR/USD and Nasdaq Price Outlook: Overbought/oversold momentum on hourly and daily time frames is raising reversal risks across the U.S. dollar, EUR/USD and Nasdaq after a strong weekly advance.

EUR/USD falls to a 2-month low despite Eurozone growth picking up. Gold under pressure as a stronger USD offsets falling oil prices.

The week continues to present challenges for the euro's short-term strength. This is reflected in the recent performance of EUR/USD, which has declined by nearly 0.6% over the last three trading sessions

The EUR/USD recovered from a modestly weaker start after after spending the last two days of last week in tight consolidation following a sizeable drop in response to a hawkish Fed rate hike in mid last week. The pair was held back as a result of Germany’s regional elections at the weekend, which made the nation’s political picture a little messier. But the downside has been limited owing to expectations of another ECB rate hike this year, and, more to the point, due to the fact oil prices have eased further at the start of this week.

The USD closed red last week despite a seemingly bullish backdrop but it made up for it this week, driven by a strong breakout in USD/JPY.

The Fed delivered a unanimous hike, stronger economic projections and a more hawkish dot plot, giving markets little reason to unwind aggressive tightening bets and keeping the dollar firmly supported.

GBP/USD unchanged after UK inflation rises and ahead of the Fed rate decision. EUR/USD looks to the FOMC rate decision.

Assuming the Fed delivers the expected hike, traders will want to know WHAT could prompt another hike, WHY they hiked this time, and HOW to interpret the dot plot.

The euro has started to face a more challenging period in the short term. The EUR/USD pair has already declined by nearly 0.81% over the last four trading sessions, a move that has begun to reinforce a meaningful bearish bias in favor of the U.S. dollar.

The dollar’s recent rebound as a result of rising bond yields and energy prices has been a key theme in the markets, which is helping to drive major FX pairs, gold, silver and copper all lower, while also weighing on stock markets. Among the major FX, the euro has been held back further by continued gains in oil prices while a closely-watched German sentiment survey today also weighed on the single currency.

The EUR/USD has taken a drop today with the pair coming under pressure from rising energy prices and a rebounding US dollar ahead of the FOMC rate decision, where a hike is all but priced in now. We have a few other central bank meetings and some important data to look forward to as well. For now, all the focus is on energy prices which have rebounded after nothing important happened to de-escalate the situation at the weekend.

EUR/USD remains locked in a tight September range, with next week’s Fed decision poised to raise the stakes for the next directional move.