Is EUR/USD a Buy?

Is EUR/USD a Buy?

The question that we are getting asked the most today is whether EUR/USD is a buy. The currency pair spent the whole week in consolidation mode within a narrow 80 pip range before finally breaking lower on Friday. The move was driven by U.S. dollar strength and risk aversion. Fundamentally, the question of whether EUR/USD is a buy all hinges on the FOMC meeting and not EZ PMIs. If the dollar continues to rise going into FOMC (and it may) EUR/USD could drop to 1.11. Ultimately we think Janet Yellen will set the stage for December tightening and this view makes buying EUR/USD at these levels difficult.

Technically however the currency pair is still holding above the 200-day SMA near 1.1145, which is the level to watch next week and it is testing the 50-day SMA. It may be worth buying EUR/USD at current levels with a stop below 1.11 for a punt because if it drops below 1.11 then there’s no support until 1.10.

Chart Of The Day

Leave a Comment

Your email address will not be published. Required fields are marked *