EUR/USD Weekly Chart Analysis – 2023-10-23

The upcoming week in the financial markets is expected to be influenced by various factors, including ongoing developments in the Israel-Gaza crisis and key economic events. One of the focal points will be the European Central Bank’s (ECB) interest rate decision. It’s widely anticipated that the ECB will maintain its current interest rates after a series of consecutive rate hikes. While there might not be significant surprises, the market will closely watch for any hints or comments regarding the ECB’s future monetary policy, given the challenges faced by the euro zone economy in recent months.

In addition to the ECB decision, global flash Purchasing Managers’ Index (PMI) data and a crucial U.S. inflation reading will also be on investors’ radar. These economic indicators can influence market sentiment and expectations. The flash PMIs, especially in the euro zone, could offer insights into how long the ECB may keep rates unchanged before potentially considering rate cuts. Moreover, data releases like flash Eurozone consumer confidence and the German Ifo index will be closely monitored for further economic insights. The United Kingdom will also contribute to market movements with its flash PMIs and employment data.

Regarding the technicals of EUR/USD currency pair, it currently shows a bearish trend on the weekly timeframe, although there might be short-term fluctuations. The price is situated below both the 50 and 200-day moving averages, indicating a bearish sentiment. In the near term, two scenarios are possible. If the price continues to rise, it could test resistance levels around 1.0595 to 1.0610. Further upward movement could target levels like 1.0622 and 1.0651. However, a reversal from current levels might lead to a test of support around 1.0539 and 1.0510, with further downward potential towards 1.0504 and 1.0482. The Relative Strength Index (RSI) suggests a bearish oversold condition on the weekly timeframe, but there has been some decrease in momentum recently. Market participants will closely follow these technical and fundamental factors in the coming week.