EUR/USD Price Analysis – Sep 16, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair continued its bullish trend, moving higher to around 1.1126 and reaching an intraday peak of 1.1130.
The upward momentum was largely driven by mounting expectations that the US Federal Reserve will aggressively ease its policies, putting significant bearish pressure on the US dollar.
The US Dollar Index (DXY) slid sharply to around 100.70, reflecting the Greenback’s weakening position.
Meanwhile, the Euro's performance against its major peers remained mixed due to uncertainty surrounding the European Central Bank’s (ECB) future interest rate cuts.
The ECB's recent decision to lower the Deposit Facility Rate by 25 basis points to 3.50% provided some support, but the lack of a clear rate-cut trajectory kept the market cautious. Despite this, the bearish sentiment surrounding the USD helped sustain the EUR/USD gains.
EUR/USD Rises on Fed Rate Cut Speculation and Weaker US Dollar
On the US front, the EUR/USD pair has been climbing due to growing speculation that the Federal Reserve (Fed) will aggressively ease its policies on Wednesday.
This anticipation has weakened the US Dollar (USD), causing the US Dollar Index (DXY) to drop sharply to around 100.70.
According to the CME FedWatch tool, the chance of the Fed cutting interest rates by 50 basis points (bps) to a range of 4.75%-5.00% this September has surged to 61%, up from 30% a week ago.
This shift follows the release of August’s Producer Price Index (PPI), which showed a lower-than-expected increase in inflation, rising just 1.7% year-over-year compared to estimates of 1.8% and July’s 2.1%.
Therefore, the increased speculation about the Fed's aggressive rate cut and the weaker US Dollar have bolstered the EUR/USD pair, driving it higher.
The DXY's sharp decline and the lower-than-expected PPI data have further supported the Euro’s strength.
EUR/USD Strengthens Amid Weaker US Dollar and ECB Rate Cut Uncertainty
On the EUR front, the EUR/USD pair is rising due to the weakening US Dollar. However, the Euro (EUR) has shown mixed performance against other major currencies because of uncertainty over the European Central Bank’s (ECB) future interest rate cuts.
The ECB recently lowered its Deposit Facility Rate by 25 basis points to 3.50% but has not provided a clear path for future rate cuts. ECB President Christine Lagarde mentioned that future rate decisions will depend on inflation trends and economic data.
Despite this, recent comments from ECB officials suggest that the fight against Eurozone inflation might be nearing its end. ECB Governing Council member Joachim Nagel expressed optimism, stating that inflation is expected to hit the 2% target by the end of next year.
However, financial markets anticipate one more rate cut in the final quarter of the year due to concerns about the German economy.
Analysts at Nomura highlighted structural issues such as Germany’s exposure to global manufacturing cycles, energy price impacts, and demographic challenges that could contribute to a recession.
Therefore, the EUR/USD pair benefits from the weakening US Dollar and the ECB's recent rate cut.
Despite mixed Euro performance due to uncertain future ECB actions, the anticipation of one more rate cut and optimism about inflation targeting 2% support the Euro's strength.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.11187, up 0.21% as the pair continues its upward trajectory, reflecting strong bullish sentiment. Immediate resistance lies at $1.1125, followed by $1.1151 and $1.1185.
The pair remains supported above its pivot point at $1.1101, signaling potential for further upside. However, with the Relative Strength Index (RSI) reaching 73, overbought conditions suggest that a short-term pullback may be on the horizon.
On the downside, immediate support is seen at $1.1072, followed by $1.1049 and deeper support at $1.1017. The 50-day Exponential Moving Average (EMA) at $1.1050 provides a key level of support, reinforcing the overall bullish trend.
A sustained move above $1.1125 would solidify the upward momentum, though traders should be cautious given the elevated RSI.
Traders are looking to enter above $1.11126 with a take-profit target at $1.11446, positioning the pair for a test of higher resistance.
However, a break below support at $1.1072 would signal a potential reversal and invite selling pressure toward the $1.1049 and $1.1017 levels. While the broader trend remains bullish, traders should monitor overbought signals and key support levels closely.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD faces resistance at $1.1125, with the RSI at 73, signaling overbought conditions.
- Key support levels are at $1.1072 and $1.1049, with the 50-day EMA at $1.1050 providing critical support.
- A break above $1.1125 could drive further gains, but caution is advised as the RSI suggests potential for a near-term pullback.
EUR/USD is trading at $1.11187, up 0.21% as the pair continues its upward trajectory, reflecting strong bullish sentiment. Immediate resistance lies at $1.1125, followed by $1.1151 and $1.1185.
The pair remains supported above its pivot point at $1.1101, signaling potential for further upside. However, with the Relative Strength Index (RSI) reaching 73, overbought conditions suggest that a short-term pullback may be on the horizon.
On the downside, immediate support is seen at $1.1072, followed by $1.1049 and deeper support at $1.1017. The 50-day Exponential Moving Average (EMA) at $1.1050 provides a key level of support, reinforcing the overall bullish trend.
A sustained move above $1.1125 would solidify the upward momentum, though traders should be cautious given the elevated RSI.
Traders are looking to enter above $1.11126 with a take-profit target at $1.11446, positioning the pair for a test of higher resistance.
However, a break below support at $1.1072 would signal a potential reversal and invite selling pressure toward the $1.1049 and $1.1017 levels.
While the broader trend remains bullish, traders should monitor overbought signals and key support levels closely.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.11126
Take Profit – 1.11446
Stop Loss – 1.10829
Risk to Reward – 1: 1.08
Profit & Loss Per Standard Lot = +$320/ -$297
Profit & Loss Per Mini Lot = +$32/ -$29
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is up 0.10%, with RSI at 63, signaling potential limited upside.
- Immediate resistance at $1.1121; support at $1.1066.
- Sell strategy below $1.1090 targets $1.1040, with a stop-loss at $1.1120.
The EUR/USD pair is trading at $1.10846, up a modest 0.10%, as the currency pair hovers around key technical levels.
The recent uptick in price signals bullish momentum, but caution is warranted with the Relative Strength Index (RSI) sitting at 63, nearing overbought territory.
This suggests potential limited upside in the near term, with market participants eyeing key resistance and support levels for further guidance.
The pivot point is located at $1.1090, which serves as a critical reference for intraday price movements. Immediate resistance is seen at $1.1121, followed by stronger levels at $1.1151 and $1.1185.
A decisive break above these levels could signal the continuation of the bullish trend, potentially triggering further gains toward the $1.12 mark. However, with the RSI approaching higher levels, the currency may face headwinds if buying pressure wanes.
On the downside, immediate support rests at $1.1066, with further support at $1.1041 and $1.1006.
The 50-day Exponential Moving Average (EMA), currently at $1.1058, aligns closely with the support zone, acting as a key level to watch for a potential retracement. Any sustained break below these levels could shift market sentiment towards a bearish outlook.
Strategically, selling below $1.1090 may be favorable, with a target of $1.1040. A stop-loss at $1.1120 would provide appropriate risk management, particularly as the pair tests its immediate resistance levels.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.10900
Take Profit – 1.10400
Stop Loss – 1.11200
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$500/ -$300
Profit & Loss Per Mini Lot = +$50/ -$30
EUR/USD Price Analysis – Sep 13, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward momentum, climbing to 1.1101. This rise is attributed to the Euro (EUR) gaining strength after the European Central Bank (ECB) announced its monetary policy on Thursday.
ECB policymaker Madis Muller’s remarks about growing confidence in inflation control and a moderate economic recovery could boost the EUR. However, concerns over services inflation and temporary inflation spikes may temper gains.
Moreover, the US Dollar (USD) weakened following weaker-than-expected US Producer Price Index (PPI) data for August.
US Dollar Weakens as Fed Rate Cut Speculation Grows, Boosting EUR/USD
On the US front, the broad-based US dollar is facing significant selling pressure. This shift comes as market speculation grows that the Federal Reserve (Fed) might cut interest rates by 50 basis points (bps) at its upcoming meeting on Wednesday.
The probability of this rate cut, as shown by the CME FedWatch tool, has surged to 43% from just 14% following the release of the US Producer Price Index (PPI) data.
On the data front, the PPI report showed that producer inflation increased by 1.7% year-over-year in August, falling short of the expected 1.8% and down from 2.1% in July. Core producer inflation, excluding food and energy prices, rose by 2.4%, missing the forecast of 2.5%.
This slower rate of price increase suggests weak consumer spending, which often boosts expectations that the Fed might lower interest rates.
Hence, the weaker-than-expected US PPI data and growing speculation of a Fed rate cut have led to a stronger Euro (EUR) against the US Dollar (USD). This boosts the EUR/USD pair as traders anticipate a more dovish Fed stance.
EUR/USD Rebounds Despite Weaker Eurozone Industrial Data and Cautious ECB Rate Adjustments
On the EUR front, the Eurozone's industrial sector faced a deeper decline in July, with industrial output dropping by 0.3% month-over-month, matching expectations but worse than June's flat reading. Annually, industrial production fell by 2.2%, an improvement from June's 4.1% drop but still worse than the forecasted 2.7%.
Despite these weak numbers, ECB policymaker Madis Muller expressed growing confidence that inflation is heading in the right direction, though he noted concerns about services inflation and expected a moderate recovery for the Eurozone economy.
Following the European Central Bank (ECB) meeting, the EUR/USD pair rebounded to 1.1100. The ECB cut the deposit facility rate by 25 basis points to 3.50% and adjusted other rates to help support lending and the economy. Although the ECB lowered its growth forecasts for the Eurozone, it expects inflation to pick up again in the fourth quarter of 2024. The ECB did not signal another rate cut for its October meeting, maintaining a cautious approach based on economic data.
Consequently, the weaker Eurozone industrial data and ECB’s cautious rate adjustments initially pressured the EUR/USD pair. However, the EUR/USD rebounded to 1.1100, as the ECB's rate cut and inflation expectations supported the Euro, countering the negative impact.
EUR/USD- Technical Analysis
The EUR/USD pair is trading at $1.10846, up a modest 0.10%, as the currency pair hovers around key technical levels. The recent uptick in price signals bullish momentum, but caution is warranted with the Relative Strength Index (RSI) sitting at 63, nearing overbought territory.
This suggests potential limited upside in the near term, with market participants eyeing key resistance and support levels for further guidance.
The pivot point is located at $1.1090, which serves as a critical reference for intraday price movements. Immediate resistance is seen at $1.1121, followed by stronger levels at $1.1151 and $1.1185.
A decisive break above these levels could signal the continuation of the bullish trend, potentially triggering further gains toward the $1.12 mark. However, with the RSI approaching higher levels, the currency may face headwinds if buying pressure wanes.
On the downside, immediate support rests at $1.1066, with further support at $1.1041 and $1.1006.
The 50-day Exponential Moving Average (EMA), currently at $1.1058, aligns closely with the support zone, acting as a key level to watch for a potential retracement. Any sustained break below these levels could shift market sentiment towards a bearish outlook.
Strategically, selling below $1.1090 may be favorable, with a target of $1.1040. A stop-loss at $1.1120 would provide appropriate risk management, particularly as the pair tests its immediate resistance levels.
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EUR/USD Price Analysis – Sep 11, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair is gaining traction and trading around the 1.1050 level, reaching an intra-day high of 1.1055. This uptick follows a dip in the US Dollar after the Trump-Harris presidential debate.
The pair is also buoyed by expectations that the US Federal Reserve might lower interest rates by 50 basis points (bps) at its upcoming meeting on September 17-18.
Hence, the significant cut could weaken the USD by reducing foreign capital inflows, which would benefit the EUR/USD pair.
However, the potential for further gains might be limited by economic concerns in the Eurozone, particularly Germany’s sluggish manufacturing sector, which is struggling due to increased foreign competition, especially in the automobile industry.
US Dollar Weakness and Fed Rate Cut Expectations Impacting EUR/USD
On the US front, the USD is weakening, pushing the EUR/USD pair up to the 1.1040s. This decline follows a debate where Vice President Kamala Harris was seen as performing better than Donald Trump, increasing her poll numbers.
As Harris gains support, Trump's policies to keep the USD strong seem less likely to succeed. Investors are also expecting the Federal Reserve to cut interest rates significantly at its meeting on September 17-18.
While a 25 basis point cut is expected, there’s a 30% chance of a 50 basis point cut, which would weaken the USD further and boost the EUR/USD pair.
Therefore, the impact of upcoming US Consumer Price Index (CPI) data for August on Fed rate-cut expectations is uncertain. Some analysts, like Ulricht Leutchmann from Commerzbank, believe the CPI figures are less crucial now as inflation is already low.
In contrast, Elias Haddad from Brown Brothers Harriman warns that higher-than-expected inflation could reduce the likelihood of a large rate cut and support the USD.
Economic Concerns and ECB Policy Impact on EUR/USD
On the EUR front, the upticks in the EUR/USD might be limited by economic concerns in the Eurozone. Germany, in particular, is experiencing a slowdown in manufacturing, especially in the key automobile sector, due to increased foreign competition. This economic weakness could dampen EUR/USD's gains.
The European Central Bank (ECB) is set to conclude its policy meeting on Thursday, with expectations for a 25 basis point cut in its deposit facility rate (DFR), lowering it from 3.75% to 3.50%.
This cut is aimed at stimulating economic growth. The ECB is also expected to reduce its main refinancing operations rate (MRO) to narrow the gap with the DFR, bringing the MRO down from 4.25% to 3.65%.
Despite these anticipated changes, there is a risk that the Euro could weaken after the announcement, particularly if the ECB revises its growth forecasts downward.
As Elias Haddad from Brown Brothers Harriman notes, a reduction in growth and inflation forecasts by the ECB could lead to a lower interest rate outlook for the Eurozone, negatively impacting the EUR/USD pair.
EUR/USD- Technical Analysis
The EUR/USD pair is currently trading at $1.10476, up by 0.26%, as the euro regains some strength amid continued market volatility.
Traders are closely monitoring the pair as it hovers just below key resistance levels, with near-term sentiment driven by U.S. inflation data and European economic reports.
Immediate resistance stands at $1.1085, with further targets at $1.1121 and $1.1154, suggesting that if bullish momentum persists, the pair could break through these levels.
On the downside, immediate support lies at $1.1018, with additional support seen at $1.0994 and $1.0969. A breach below these support levels could signal a deeper pullback in the near term.
Technical indicators are mixed, with the Relative Strength Index (RSI) at 46, indicating a slightly bearish bias but leaving room for a potential upward move.
The 50-day Exponential Moving Average (EMA) sits at $1.1063, just above the current price, suggesting a critical level to watch. A break above this EMA could confirm a more sustained bullish trend, whereas failure to surpass it may limit gains.
For traders, a potential buying opportunity exists above $1.10185, with a take-profit target set at $1.10757. Stop-loss orders should be placed around $1.09832 to limit downside risk, especially if the pair revisits its support levels.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance is at $1.1085, with next resistance at $1.1121.
- RSI at 46 indicates slightly bearish momentum but potential for upside.
- 50-day EMA at $1.1063 is a crucial level for confirming bullish strength.
The EUR/USD pair is currently trading at $1.10476, up by 0.26%, as the euro regains some strength amid continued market volatility.
Traders are closely monitoring the pair as it hovers just below key resistance levels, with near-term sentiment driven by U.S. inflation data and European economic reports.
Immediate resistance stands at $1.1085, with further targets at $1.1121 and $1.1154, suggesting that if bullish momentum persists, the pair could break through these levels.
On the downside, immediate support lies at $1.1018, with additional support seen at $1.0994 and $1.0969. A breach below these support levels could signal a deeper pullback in the near term.
Technical indicators are mixed, with the Relative Strength Index (RSI) at 46, indicating a slightly bearish bias but leaving room for a potential upward move.
The 50-day Exponential Moving Average (EMA) sits at $1.1063, just above the current price, suggesting a critical level to watch. A break above this EMA could confirm a more sustained bullish trend, whereas failure to surpass it may limit gains.
For traders, a potential buying opportunity exists above $1.10185, with a take-profit target set at $1.10757. Stop-loss orders should be placed around $1.09832 to limit downside risk, especially if the pair revisits its support levels.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.10185
Take Profit – 1.10757
Stop Loss – 1.09832
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$572/ -$353
Profit & Loss Per Mini Lot = +$57/ -$35
EUR/USD Price Analysis – Sep 09, 2024
Daily Price Outlook
The EUR/USD pair is under pressure, trading below 1.1050 as investors brace for the European Central Bank (ECB) policy decision this Thursday.
The ECB is expected to cut its key borrowing rates by 25 basis points (bps) for the second time in its current policy-easing cycle, which started in June.
With Eurozone inflation continuing to decline—Harmonized Index of Consumer Prices (HICP) fell to 2.2% in August—further monetary easing appears almost certain.
Germany's technical recession, which saw its economy contract in the second quarter, adds to the mounting challenges.
ECB policymakers, including board member Piero Cipollone, have expressed concerns about the German economy's weakness and the risk of overly restrictive monetary policy, leading to the consensus for further rate cuts by year-end.
Weak Economic Sentiment and Worsening Investor Confidence
The Eurozone’s economic outlook remains bleak. Recent data showed that Sentix Investor Confidence dropped from -13.9 in August to -15.4 in September, reflecting growing pessimism about the region's economic health.
The German economy’s slowdown continues to drag down sentiment across the Eurozone, limiting the prospects for any meaningful recovery in the near term.
Subdued demand from domestic and international markets is further weakening the Euro, with EUR/USD failing to break key resistance levels as a result.
The Eurozone’s poor economic prospects, combined with lower inflation and weak investor confidence, have kept the Euro in a downward spiral against its peers.
US Dollar Strength After Nonfarm Payroll Data
Meanwhile, the US Dollar has strengthened, supported by a mixed US Nonfarm Payrolls (NFP) report for August.
While new payrolls were fewer than expected at 142K, the Unemployment Rate dropped as anticipated to 4.2%, and Average Hourly Earnings grew faster than projected at 0.4%.
The US Dollar Index (DXY), which tracks the USD against six major currencies, rose to near 101.50, helping push EUR/USD further below 1.1050.
The Federal Reserve (Fed) is now less likely to cut interest rates aggressively, with FedWatch Tool indicating a 27% probability of a 50-bps rate cut in September.
The market’s focus is now on the upcoming US Consumer Price Index (CPI) data due on Wednesday, which could introduce more volatility for EUR/USD.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.10660, edging down by 0.06% as the market faces continued pressure. A weak Euro is struggling to find its footing, with the pair trading just below the pivot point at $1.1084.
With the 50-day Exponential Moving Average (EMA) sitting slightly lower at $1.1082, the pair remains technically bearish, unable to gather the strength needed for an upward breakout.
The RSI indicator stands at 41, reflecting neutral but leaning towards oversold conditions, further reinforcing a bearish sentiment in the short term.
Immediate resistance looms at $1.1121, followed by higher ceilings at $1.1154 and $1.1193. Without a decisive break above these levels, the Euro may continue to encounter selling pressure, particularly if broader economic concerns such as inflation in the Eurozone continue to cast a shadow over investor sentiment.
On the downside, immediate support can be found at $1.1034, with key levels further below at $1.1000 and $1.0969.
If the pair breaches the $1.1034 mark, it could quickly descend toward the psychologically significant $1.1000 level, which serves as a key defensive barrier. A breakdown below this threshold would likely trigger further declines, exposing the $1.0969 support.
The recommended strategy is to sell positions below $1.10836, with a target profit set at $1.10323. To protect against upside risk, a stop-loss should be placed at $1.11141, just above immediate resistance.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD remains below the $1.1084 pivot point, signaling potential further downside.
- Immediate resistance at $1.1121 caps any near-term bullish momentum.
- Selling below $1.10836 is recommended, with a take-profit target of $1.10323.
The EUR/USD pair is currently trading at $1.10660, edging down by 0.06% as the market faces continued pressure. A weak Euro is struggling to find its footing, with the pair trading just below the pivot point at $1.1084.
With the 50-day Exponential Moving Average (EMA) sitting slightly lower at $1.1082, the pair remains technically bearish, unable to gather the strength needed for an upward breakout.
The RSI indicator stands at 41, reflecting neutral but leaning towards oversold conditions, further reinforcing a bearish sentiment in the short term.
Immediate resistance looms at $1.1121, followed by higher ceilings at $1.1154 and $1.1193.
Without a decisive break above these levels, the Euro may continue to encounter selling pressure, particularly if broader economic concerns such as inflation in the Eurozone continue to cast a shadow over investor sentiment.
On the downside, immediate support can be found at $1.1034, with key levels further below at $1.1000 and $1.0969. If the pair breaches the $1.1034 mark, it could quickly descend toward the psychologically significant $1.1000 level, which serves as a key defensive barrier.
A breakdown below this threshold would likely trigger further declines, exposing the $1.0969 support.
The recommended strategy is to sell positions below $1.10836, with a target profit set at $1.10323. To protect against upside risk, a stop-loss should be placed at $1.11141, just above immediate resistance.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.10836
Take Profit – 1.10323
Stop Loss – 1.11141
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$513/ -$305
Profit & Loss Per Mini Lot = +$51/ -$30
EURUSD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Resistance: $1.11537; Immediate Support: $1.10717
- 50-Day EMA: $1.10920 acts as crucial support, maintaining a bullish trend.
- RSI at 65: Reflects bullish momentum, but caution is warranted as overbought conditions approach.
EUR/USD is trading at $1.11182, up 0.07%, showing signs of strength as the pair edges higher within a tight range. The 4-hour chart indicates bullish momentum, as the euro holds above its key support levels.
The pair is currently eyeing the pivot point at $1.11537, which will be crucial in determining the next leg of the move. A break above this level could see EUR/USD test immediate resistance at $1.11932, with further gains pushing towards $1.12302.
However, a failure to breach the pivot could open the door for a retracement, with immediate support found at $1.10717 and deeper support at $1.10337 and $1.09995.
The 50-day Exponential Moving Average (EMA) at $1.10920 is acting as a key dynamic support, reinforcing the bullish bias as long as the price remains above this level.
The Relative Strength Index (RSI) is sitting at 65, indicating moderately bullish momentum but nearing overbought territory. A break above 70 could signal further gains, but traders should remain cautious of a potential correction if the RSI starts to roll over.
Given the current technical setup, traders may consider entering long positions above $1.11011, with a take-profit target at $1.11549 and a stop-loss at $1.10716. The technical outlook remains positive as long as the pair holds above the 50-day EMA and the pivot point is respected.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.11011
Take Profit – 1.11549
Stop Loss – 1.10716
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$538/ -$295
Profit & Loss Per Mini Lot = +$53/ -$29
EUR/USD Price Analysis – Sep 06, 2024
Daily Price Outlook
During the European trading session on Friday, the EUR/USD extended its winning streak for the third consecutive session, reaching a fresh weekly high of 1.1121. This rise was primarily driven by a weakening US Dollar (USD).
The US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, fell below the key support level of 101.00.
The decline in the USD's appeal followed disappointing US labor market data, including July's JOLTS Job Openings and August's ADP Employment report, which heightened concerns about deteriorating labor market conditions.
USD Weakness and Fed Rate Cut Speculation Boost EUR/USD Ahead of NFP Data
On the US front, the broad-based US dollar bearish bias is pushing the EUR/USD higher. The US Dollar Index (DXY), which measures the USD against six major currencies, has fallen below the key support level of 101.00.
This decline follows weak US labor market data, including July's JOLTS Job Openings and August's ADP Employment report, showing the lowest job vacancies and payroll additions in over three years.
Despite August's ISM Services PMI data being better than expected, it hasn’t been enough to support the USD. This has led to increased market speculation that the Federal Reserve might cut interest rates more aggressively.
Investors are now focusing on the upcoming US Nonfarm Payrolls (NFP) data for August, set to be released at 12:30 GMT. The report is expected to show an increase in job hires to 160K from July's 114K and a decrease in the unemployment rate to 4.2% from 4.3%.
Additionally, wage growth is anticipated to accelerate, with Average Hourly Earnings expected to rise by 3.7% year-on-year and by 0.3% month-on-month. These figures will be crucial for understanding future interest rate decisions.
Therefore, the USD's weakness and speculation of aggressive Fed rate cuts are driving the EUR/USD higher. If the upcoming NFP data confirms weak labor market conditions and slower wage growth, the EUR/USD could continue to rise as market expectations shift.
Eurozone Data and ECB Rate Cuts Strain Euro, But USD Weakness Drives EUR/USD Higher
On the EUR front, European economic data has not provided much support for the Euro. July's EU Retail Sales data came in worse than expected, showing a decline of 0.1% year-on-year, instead of the anticipated increase to 0.1%. This follows a revised contraction of 0.4% in the previous period, indicating ongoing economic challenges in the Eurozone.
Additionally, the European Central Bank (ECB) is expected to cut interest rates twice more this year. This outlook could further weigh on the Euro, as lower interest rates might reduce the currency's appeal to investors. Despite these challenges, the Euro is still benefiting from the weakness in the US Dollar, driving the EUR/USD pair higher.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.11182, up 0.07%, showing signs of strength as the pair edges higher within a tight range. The 4-hour chart indicates bullish momentum, as the euro holds above its key support levels.
The pair is currently eyeing the pivot point at $1.11537, which will be crucial in determining the next leg of the move. A break above this level could see EUR/USD test immediate resistance at $1.11932, with further gains pushing towards $1.12302.
However, a failure to breach the pivot could open the door for a retracement, with immediate support found at $1.10717 and deeper support at $1.10337 and $1.09995.
The 50-day Exponential Moving Average (EMA) at $1.10920 is acting as a key dynamic support, reinforcing the bullish bias as long as the price remains above this level.
The Relative Strength Index (RSI) is sitting at 65, indicating moderately bullish momentum but nearing overbought territory. A break above 70 could signal further gains, but traders should remain cautious of a potential correction if the RSI starts to roll over.
Given the current technical setup, traders may consider entering long positions above $1.11011, with a take-profit target at $1.11549 and a stop-loss at $1.10716. The technical outlook remains positive as long as the pair holds above the 50-day EMA and the pivot point is respected.
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