EUR/USD: the bearish bias remains in tact, 1.1650 eyed

Currently, EUR/USD is trading at 1.1739, down -0.63% on the day, having posted a daily high at 1.1816 and low at 1.1730.

Markets are bearish on the euro in respect to mixed messages from the ECB and timings of adjustments to QE while the Fed is still anticipated to hike rates again before the year is out and three more times before the end of 2018. 

There has been a resurgence in the greenback due to the renewed optimism over the US President Donald Trump's tax reform proposal and a continued economic recovery in the US, despite the weather damage that the Fed regards as a transitory effect. Just today, the September ISM manufacturing report has risen to 60.8 from 58.8 versus the 58.1 consensus forecast. This is the strongest reading for the survey since May 2004 and suggests that the sector is benefiting from a strong domestic economy, a weak dollar and a strengthening global economy, as explained by analysts at ING Bank. 

US: Manufacturing marches on - ING

The higher rates in the US underpins the offer in EUR/USD and the weekend's events in Catalonia do not do much to support the case for the EU in the longerterm, while Greece and Brexit and the recent concerns over the anti-EU far right party, (Alternative for Deutschland, AfD), entering parliamnt in Germany continues to cast a dark shadow over Brussles.  

90% Of Catalans voted "Yes" To leave Spain – RTRS

EUR/USD levels

EUR/USD has been on the backfoot within a bearish consolidation period since the 7th September highs at 1.2092. The break of 1.1840 to the downside and the recovery to just 1.1832 extended the bear's optimism. the price has subsequently fallen back into the daily cloud and below the 55-DSMA with daily RSI still biased to the downside. The hourly charts have the 21 sma crossing down the bearish/neutral 100 sma as a further indication of the weight of the downside.  A break of 1.1717, the daily Low for Sept 27 and 1.1708, the daily low of Aug 18, opens the midpoint of the 1.16 handle.  Intraday rallies are indicated to fail circa 1.1833/55, according to analysts at Commerzbank.