CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

EUR/USD continues to make new 15-month lows

October 12, 2021 8:38 PM

EUR/USD continues to make lower lows and lower highs.  And that, by definition, is a downtrend.   However, it may not have as much to do with the Euro, and it has to do with the US Dollar.  The US Dollar Index broke out of a short-term symmetrical triangle near 94.40 and is desperately trying to push above a long term trendline (red) dating back to 2011.  Price halted at the trendline, hear 94.56 as it moves towards the September 24th, 2020 highs of 94.76.

Source: Tradingview, Stone X

What is the US Dollar Index (DXY)?

EUR/USD makes up 57% of the US Dollar Index (DXY), so it’s no surprise that as the DXY pushes towards new highs,  that EUR/USD is moving in a similar, but opposite, direction.  Today, the pair reached a low of 1.1524 thus far, its lowest level since July 21st, 2020.    Price formed a double top near 1.1905 back in August and September, and finally broke lower on September 29th.  The target for the double top is near 1.1400, however price must first pass through strong support between 1.1490 and 1.1515, which is:

  1. The 161.8% Fibonacci retracement from the August 20th lows to the September 3rd highs
  2. The 50% retracement level from the March 2020 lows to the January 6th highs
  3. Horizontal support dating back to spike highs from March 2020

Source: Tradingview,  Stone X

Notice also that the RSI is diverging from price, an indication that price may be ready for a bounce.

 

Trade EUR/USD now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

 

On a 240-minute timeframe, the downtrend is much more noticeable within the channel.  In addition to the support mentioned above as price moves towards the double top target, there is also currently support at the bottom trendline of the downward sloping channel near 1.1460.  Resistance is above at the top downward sloping trendline near today’s highs of 1.1570.  If price breaks above, there is resistance at the neckline of the double top near 1.1665 and then the 50-Day Moving Average (see daily) near 1.1730.

Source: Tradingview,  Stone X

EUR/USD has reached its lowest level since July 21st, 2020.  However, note that it’s probably not all due to the Euro.  Given the Euro makes up 57% of the DXY, it seems much of the reason for the new lows is because DXY is putting in new yearly highs!

Learn more about forex trading opportunities.

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024