EUR/USD Skyrockets To The Highest Level Since January
Aug, 25th 05:10
The EUR/USD pair surged to a daily high of 1.1713, before giving up half of its intraday gains, closing the day however, at levels not seen since January this year.
The 1 hour chart shows that pair retreated down to 1.1517 after reaching the mentioned high, struggling now a few pips above the 38.2% retracement of today’s run at 1.1580.
In the same chart, the technical indicators have corrected extreme overbought readings and stabilized well above their mid-lines, whilst the 20 SMA heads strongly higher, converging with the 61.8% retracement of the same rally around 1.1500.
In the 4 hours chart, the technical indicators are slowly beginning to ease, but remain in extreme overbought territory, with the RSI indicator around 90. The wild moves are far from over, and with the Asian opening, the market could run again into panic, making of the technical indicators, worthless intraday tools.
In the meantime, Panic selling took over markets after the Shanghai Composite added another 8.5% decline to last week losses. Stocks sunk worldwide, dragging the USD hundreds of pips lower at the beginning of the American session.
European stocks lost over 4%, whilst US indexes also closed sharply lower. Commodities also collapsed to multi-year lows. Despite the markets have stabilized by the end of the US session, the risk of another round of panic selling looms ahead of the Asian opening. China’s Central Bank may take additional measures, exacerbating the risk aversion sentiment. Additionally, chances of a September rate hike have decreased almost to zero with the latest markets’ developments, which will also weighed on stocks.