Dollar Stands Tall, Euro and Sterling Down on Recession Worries
| Action Insight Weekly Report 9-2-23 |
| Dollar Stands Tall, Euro and Sterling Down on Recession Worries |
In a week marked by high volatility, Dollar proved resilient, closing within its established range against other major currencies after intra-week selloff. This performance quells, at least for now, fears of bearish reversal for the greenback. Indeed, sentiment has shifted to favor near-term upside for Dollar, which is likely to maintain its strength at least until Fed releases new economic projections later this month. Contrastingly, Euro emerged as the week's weakest performer amid rising expectations that ECB will hit the pause button on interest rate changes this month. Weakness in Euro has also dragged down Swiss Franc, which ended as the week's second-worst performer. British Pound lingered not far behind, showing vulnerability against the resilient Dollar. Australian Dollar was the best performer of the week, buoyed by improving sentiment towards China's economy. However, this rally appears to be in corrective mode only, lacking decisive momentum needed to confirm a sustained uptrend. Consequently, renewed wave of selling could emerge at any moment, particularly if optimism about China's economic outlook starts to wane. Following closely behind was New Zealand Dollar, which also enjoyed a strong week. Yen ended mixed as the pull back in major benchmark yields didn't last long. |
EUR/USD Weekly Outlook EUR/USD's rebounded to 1.0944 last week, but was rejected by 55 D EMA (now at 1.0924) and fell sharply since then. The development keeps near term outlook bearish. Immediate focus is now on 1.0764 support this week, firm break there will resume whole decline from 1.1274 to 1.0609/34 cluster support next. Meanwhile, further decline will be in favor as long as 1.0944 resistance holds, in case of recovery. | |
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