U.S. Dollar Flexes Its Muscle

The euro managed to gain momentum amid the positive outcome of the Bank of England meeting. However, its growth did not last long. On Friday, the euro resumed the downward movement. Its decline was not triggered by the Fed’s announcement of a more hawkish stance on monetary policy or the ongoing energy crisis in Europe. The actual reason is the strengthening of the greenback. It began just before the opening of the US session when the forecast for durable goods orders was upwardly revised. This data will be unveiled today. Initially, economists expected the reading to decline by 0.2%. However, this forecast was significantly raised. Now, they assume that durable goods orders are likely to grow by 0.4%. This means that retail sales will keep rising and consumer activity will continue to recover. So, the stable growth of the leading economic indicators is certainly bullish for the US dollar This is why today, it is likely to move higher.

US Durable Goods Orders:

The EUR/USD pair is moving sideways in the range of 1.1700/1.1750, constantly rebounding from the indicated levels. The RSI indicator stays within 30 and 70, which confirms the formation of a temporary flat in the market.Since early September, the average daily volatility totals 47 pips, which is appropriate for this asset class.On the daily chart, the price fluctuation is seen near the low of the descending cycle. This is why bears are highly likely to push the euro lower, which may lead to a change in the trend.

Outlook

The price is expected to fluctuate in the range of 1.1700/1.1750 in the short term. So, it would be wise to stick to the breakout strategy.If the price consolidates above 1.1760, it is recommended to go long.

Alternatively, it is better to open short positions if the price fixes below 1.1700.

Complex indicator analysis gives a buy signal in the short-term after the price rebound from the lower limit of the range. Technical indicators show a different signal on the intraday chart because the price is moving in the sideways channel. InstaForex Group

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