In Asian trading on Tuesday, October 17, 2023, the EUR/USD pair experienced a pullback from recent gains, with prices hovering near the key level of 1.0550. Forex and crypto traders are closely watching the release of October's ZEW Economic Sentiment Survey, which is expected to improve slightly from -8.9 to -8.0.
European Central Bank (ECB) President, Christine Lagarde, has informed eurozone finance ministers about the ECB's vigilant monitoring of energy prices and the Israel-Hamas conflict. These factors are identified as potential triggers for inflationary pressures in the Forex market.
From a technical perspective, the 21-day Exponential Moving Average (EMA) at 1.0587 serves as the immediate resistance. A breakthrough here could strengthen the EUR/USD pair's upward momentum, aiming for the critical 1.0600 level and potentially reaching the 23.6% Fibonacci retracement at 1.0643. On the downside, the weekly low of 1.0508, closely aligned with 1.0500, stands as the next support level.
The Moving Average Convergence Divergence (MACD) indicates that short-term averages are subordinate to their long-term counterparts, but a notable divergence shows the MACD rises above its signal line. This suggests a possible shift towards a bullish bias. Despite this, the overall sentiment for the EUR/USD pair remains bearish, supported by the 14-day Relative Strength Index (RSI) consistently below the 50 benchmark.
In the context of the Forex market, the EUR/USD pair's recent retreat reflects the influence of economic announcements and technical indicators. Forex traders are closely monitoring the outcome of the ZEW Economic Sentiment Survey and the impact of energy prices and geopolitical tensions on the Euro's value. Technical levels such as the 21-day EMA and key support at 1.0500 are crucial for traders to watch. Additionally, the MACD signals a possible shift in momentum, but the overall sentiment remains bearish, as indicated by the RSI. These factors contribute to the dynamic nature of the Forex market, where traders need to navigate various variables to make informed decisions.