By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
EUR/USD is looking quite stable; it is rising a little bit early in the fourth September week. All significant drivers have been published, so what investors have to do right now is to analyze them correctly and draw the right conclusions.
So, the information that is already known: the US Federal Reserve cut the key rate down to 1.75%-2.00%, but did it very carefully without any unnecessary comments for investors. The regulator placed specific emphasis on the fact that it wasn’t going to bow to the White House and would continue implementing the current monetary policy instead.
For the American Dollar, the signals that the Fed isn’t going to be aggressive in cutting its rates are surely positive.
Another thing that supports the USD this morning is the resumption of trade talks between the USA and China. Last Thursday, the parties already met and tried to resume the dialog, but barely had any progress in talks, which is widely expected by financial markets.
As we can see in the H4 chart, EUR/USD has failed to fix above none of these levels: 1.1080, 1.1040, and 1.1020. Right now, the pair continues trading downwards. Possibly, the price may reach 1.0986 and then grow towards 1.1000. After that, the instrument may form a new descending structure towards 1.0965 and then start another growth to reach 1.1040, thus continuing its consolidation inside a wide range and forming Triangle pattern around 1.1040. If the market breaks this pattern to the downside, the downtrend may continue. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line has broken 0 downwards and right now is steadily moving to the downside, thus confirming further downtrend.
In the H1 chart, EUR/USD is consolidating around 1.1030. Possibly, the pair may form one more descending structure to reach 1.0985 and then resume growing towards 1.1040. Later, the market may continue trading inside the downtrend with the target at 1.0965. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving directly downwards. After breaking 50 to the downside, the indicator may boost the downtrend.
Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.