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market analysis
Can the euro turn a rebound into a reversal?
Wonderful Introduction:
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Hello everyone, today XM Forex will bring you "【XM Group】: Can the euro turn a rebound into a reversal?" Hope it will be helpful to you! The original content is as follows:
On Friday (September 26), "Strong Data + Tariff Shadow" double-clicked the US dollar, and the euro struggled at a low level: the euro against the US dollar traded around 1.1670 before the session, and the weekly line still fell by about 0.55%.
Brands:
Since this week, the US side's stronger-than-expected data and policy uncertainty have jointly increased the difficulty of the US dollar's pullback. The final real GDP value in the second quarter was revised up to 3.8% (previously 3.3%), and durable goods orders increased by 2.9% month-on-month in August (previously fell by two consecutive months: -2.7% from June to July, and the market was originally expected to be -0.5% in August). At the same time, the initial unemployment claim for the week ended September 20 fell to 218K (previously 232K, expected to be 235K). This set of data alleviates concerns about slow growth, and has allowed the "slowly loose" central bank path to be endorsed by hawks, pushing U.S. bond yields to rise again and the US dollar gains new momentum.
At the policy level, the US announced that it would impose new tariffs of 25%/100%/50% on heavy trucks, branded medicines and cabinets respectively, and risk preferences fell significantly during the Asian period; the safe-haven dollar was supported, and the euro's rebound space was limited. In terms of interest rate expectations, driven by data, the market's pricing for short-term easing has cooled down: tools show that the probability of the Federal Reserve cutting interest rates in October is about 87% (more than 90% earlier), and the probability of a total of "50bp" in the two meetings this year has dropped to 62% (nearly 80% last week).
The focus shifts to the PCE price index. Consistent expectations point to: Toutiao 2.7% year-on-year (2.6% in July), while core 2.9% year-on-year. If the headlines fall below 3% and the core does not rise, the elasticity of easing expectations remains, but in the face of more hardcore growth/employment data, the euro's counterattack is still possible"Stop at rebound."
Technical surface:
Daily chart shows that Bollinger middle rail 1.1717, upper rail 1.1845, and lower rail 1.1588 have given a clear interval framework. The exchange rate is currently 1.1670 below the middle track. Recently, the K-line has rebounded and then fell again. It touched the low point of 1.1645 and then pulled back to 1.1670, indicating that the buying order below continues to be carried out on the middle and lower tracks, but the middle track 1.1717 has changed from the "oscillation axis" to dynamic resistance.
In terms of indicator resonance: MACD's DIFF=0.0016, DEA=0.0028, and cylinder=-0.0025, a structure dominated by a slight empty square near the zero axis, with weak kinetic energy; RSI(14)≈45.6822, located at the lower neutral edge, indicating that the trend is not strong and tends to be weak consolidation. Structurally, if it closes above 1.1717, the upward backtest of 1.1845 will be opened; otherwise, if the loss of 1.1645 will be measured again 1.1588, and below, the previous low-density zone 1.1573 and further 1.1391. Before the Bollinger bandwidth has expanded significantly, the box characteristics of "middle rail suppression and lower rail bearing" are still the main theme.
Preview of Market Sentiment:
This week's xn--xm-6d1dw86k.combination of "growth resilience + tariff news" strengthens the theme of safe-haven and interest rate spreads. The long-domestic market sentiment of the US dollar is dominant, and the euro's rebound depends more on short cover and data "disappointment". The equity market experienced a decline in risk preference after the news was implemented, and the cross-trading also reflected the return of the "dollar liquidity premium". As far as market consensus is concerned, short-term funds are more willing to implement mean regression/interval strategies within the framework of 1.1588–1.1717, and remain restrained against directional exposure before macrocatalysis (PCE) is implemented.
The extreme crowding signal has not yet appeared at the emotional level: on the one hand, the "middle range" of core inflation of 2.9% limits the imagination of "fast easing"; on the other hand, the data of Europe that week was lackluster and failed to provide a new story of "helding" with the US dollar.
Future Outlook:
Short-term bullish situation (repair rebound): If PCE headlines are below 2.7% or core is below 2.9%, coupled with any "dove-oriented wording", U.S. Treasury yields may fall, and the euro is expected to test and try to stand above 1.1717. If the daily line breaks up and closes above the middle track, the retracement-back test path to 1.1760–1.1845 will be opened (corresponding to the Bollinger upper edge attraction). However, before the trend is verified, 1.1717 is still regarded as the primary resistance level and the trend watershed.
Short-term bear situation (weakness continues): If PCE headlines are 2.7% and core 2.9% remain stable/upward and accompanied by "resilience narrative", the US dollar will be supported by momentum indicators. 1.1645 Once effectively penetrated by the physical negative line, it may accelerate to 1.1588 during the day, and pay attention to 1.1573 after falling; if risk aversion heats up or US debt climbs again, the remote support of 1.1391 cannot be ruled out to be "tested with the trend".
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