EURUSD Nearing Key Resistance As US Consumer Confidence Improves

Summary:

The EURUSD is challenging a key resistance on the daily chart, even as US Consumer Confidence improves in September to 6-month highs.

The EURUSD continues to trade higher on the day but may find its ascent capped as it approaches a key resistance, on a day that the markets are keenly watching for the start of the US Presidential Debates. However, other news are impacting the markets at the moment.

Data just released by the Conference Board indicates that US Consumer confidence made a sharp improvement in September, after rising to 101.8. This level, which is the highest reading attained since the onset of the coronavirus epidemic in the US in March, was a vast improvement from last month’s upward revision of 86.3 in August and also better than the market expectation of 90.0.

Details reveal that the Consumer Present Situation Index rose from 85.8 to 98.5, while the Consumer Expectations Index experienced a sharp spike from 86.6 to 104.

The US Dollar did not respond to the vastly improved figures, but may still find some strength on the EURUSD if the current recovery pullback move meets resistance at the lower border of the rounding top pattern on the daily chart.

Technical Outlook for EURUSD

The pair broke below the neckline of the rounding top pattern last week but has experienced a pullback to the upside as price attempts to return to where it came from. Today’s candle on the daily chart is now challenging this neckline resistance at 1.17313. A rejection at this level allows for the decline to resume, targeting 1.15916 initially. A further drop below this level brings in 1.13954 into the picture, with 1.14161 and 1.13282 forming additional targets to the south.

On the flip side, a break of the neckline to the upside challenges the resistance at 1.18008. Only a break of this resistance will negate the pattern, allowing the EURUSD to continue its ascent in the direction of the major trend towards 1.19472 and possibly 1.20560.

The Q4 outlook for price direction on this pair is analyzed in our Q4 Outlook Report.