EUR/USD Price Analysis – Aug 02, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend and edged higher around 1.0830, hitting an intra-day high of 1.0838.
This upward movement can be attributed to the hotter-than-expected Eurozone preliminary Harmonized Index of Consumer Prices (HICP) in July, which has increased inflation concerns and led to reduced investor confidence in the euro.
Meanwhile, the US dollar shows a subdued performance as a string of weak US economic data points to a slowdown in the economy. The major currency pair is expected to remain on the sidelines as investors await the United States (US) Nonfarm Payrolls (NFP) data for July, which will be published at 12:30 GMT.
EUR/USD May Rise as US Dollar Weakens on Dovish Fed Guidance and Economic Data
On the US front, the broad-based US dollar failed to stop its downward trend and edged lower, even though the Fed leaned towards policy normalization in September. On Wednesday, the Fed kept interest rates unchanged at 5.25%-5.50% but gave dovish guidance.
Fed Chair Jerome Powell suggested that a rate cut could be possible in September if inflation aligns with expectations and the economy remains strong. Ahead of the US Nonfarm Payrolls (NFP) report, the dollar shows weakness due to recent poor economic data, and the US Dollar Index (DXY) fell to around 104.20.
On the data front, economists estimate that 175,000 new jobs were added in July, down from 206,000 previously, with the Unemployment Rate expected to hold steady at 4.1%. Investors will watch the Average Hourly Earnings data, which is forecasted to show a slowdown in annual wage growth to 3.7% from 3.9%, with a monthly increase of 0.3%.
Additionally, the US ISM Manufacturing PMI report for July revealed a faster-than-expected contraction to 46.8, compared to the estimated 48.8. Initial Jobless Claims for the week ending July 26 rose to 249,000, higher than the expected 236,000 and the previous 235,000.
Therefore, the EUR/USD pair could benefit from the US dollar's weakness and dovish Fed outlook. With weaker US economic data and potential rate cuts, the euro gains an advantage, driving the EUR/USD pair higher as investors react to these conditions.
Euro Faces Pressure Amidst Strong Eurozone Inflation and GDP Growth
On the EUR front, the euro struggles to gain traction despite higher-than-expected Eurozone inflation and GDP growth. The Eurozone's preliminary HICP for July rose to 2.6%, surpassing expectations of 2.4%, and core HICP increased to 2.9% from an expected 2.8%. Additionally, the GDP growth for Q2 was 0.3%, above the anticipated 0.2%.
This combination of persistent inflation and steady growth dampens expectations for European Central Bank (ECB) rate cuts. While some ECB policymakers are open to the possibility of rate cuts, others remain cautious about committing to this path.
Therefore, the EUR/USD pair face pressure as higher inflation and stronger GDP growth in the Eurozone reduce expectations for ECB rate cuts. This limit the euro's upward momentum against the dollar.
EUR/USD - Technical Analysis
The EUR/USD pair is trading at $1.08040, marking a slight increase of 0.05% as markets digest recent economic data and central bank signals. The 4-hour chart indicates that the pair is currently trading just below the pivot point of $1.0819, suggesting a cautious market sentiment.
Immediate resistance is at $1.0849, with further barriers at $1.0870 and $1.0903. For the euro to gain upward momentum, it needs to break decisively above these levels.
On the downside, support is found at $1.0777, with additional support at $1.0741 and $1.0710. A breach of these support levels could lead to a more pronounced decline, especially if US economic data continues to show resilience.
The Relative Strength Index (RSI) is at 45, indicating that the pair is neither overbought nor oversold, providing room for potential moves in either direction.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0834, which the pair is currently trading below, suggesting a bearish outlook in the short term.
Traders are advised to consider selling below $1.08182, with a target take-profit level at $1.07584 and a stop-loss set at $1.08481. This strategy allows traders to capitalize on potential downward moves while managing risk effectively.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trades at $1.08040, up 0.05%, amid mixed economic signals and central bank insights.
- RSI at 45 suggests neutral conditions; potential for moves in either direction remains.
- Sell below $1.08182; target take-profit at $1.07584, with a stop-loss at $1.08481.
The EUR/USD pair is trading at $1.08040, marking a slight increase of 0.05% as markets digest recent economic data and central bank signals. The 4-hour chart indicates that the pair is currently trading just below the pivot point of $1.0819, suggesting a cautious market sentiment.
Immediate resistance is at $1.0849, with further barriers at $1.0870 and $1.0903. For the euro to gain upward momentum, it needs to break decisively above these levels.
On the downside, support is found at $1.0777, with additional support at $1.0741 and $1.0710. A breach of these support levels could lead to a more pronounced decline, especially if US economic data continues to show resilience.
The Relative Strength Index (RSI) is at 45, indicating that the pair is neither overbought nor oversold, providing room for potential moves in either direction.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0834, which the pair is currently trading below, suggesting a bearish outlook in the short term.
Traders are advised to consider selling below $1.08182, with a target take-profit level at $1.07584 and a stop-loss set at $1.08481. This strategy allows traders to capitalize on potential downward moves while managing risk effectively.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08182
Take Profit – 1.07584
Stop Loss – 1.08481
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$598/ -$299
Profit & Loss Per Mini Lot = +$59/ -$29
EUR/USD Price Analysis – July 31, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend and drew further bids around $1.0842, hitting an intra-day high of $1.0848. However, this rise was driven by stronger-than-expected Eurozone inflation for July and a notable decline in the US Dollar.
The higher Eurozone inflation has fueled speculation about whether the European Central Bank (ECB) might resume its policy easing cycle at the upcoming September meeting.
Concurrently, the US Dollar has weakened in anticipation of dovish guidance from the Federal Reserve, which is expected to keep interest rates unchanged for the eighth consecutive time within the 5.25%-5.50% range. This combination of factors has supported gains in the EUR/USD pair.
Eurozone Inflation Surge Challenges ECB Rate Cuts and Boosts EUR/USD
On the EUR front, the shared currency pair has gained traction as Eurozone inflation surged unexpectedly in July. This has raised doubt on whether the European Central Bank (ECB) will continue its planned policy easing in the September meeting. investors had anticipated that the ECB would cut interest rates two more times this year.
However, the persistent inflation data suggests that returning to the 2% target will face challenges, potentially delaying this goal until 2025.
On the data front, the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) report revealed that both headline and core inflation, which excludes volatile items like food and energy, accelerated more than anticipated.
Headline HICP increased to 2.6%, defying expectations of a drop to 2.4% from June's 2.5%. Core HICP also rose to 2.9%, surpassing the forecast of 2.8%.
Therefore, the unexpected rise in Eurozone inflation and the potential delay in ECB rate cuts have bolstered the EUR/USD pair. The higher inflation figures support the euro, contributing to its strength against the US dollar.
Impact of Weakening USD and Fed Expectations on EUR/USD Pair
On the US front, the broad-based US dollar has lost its traction and edged lower ahead of the Federal Reserve (Fed) policy announcement at 18:00 GMT. This decline is driven by expectations that the Fed will provide dovish guidance on interest rates, keeping them unchanged for the eighth consecutive time in the 5.25%-5.50% range.
Investors are also awaiting the ADP Employment Change data, set for release at 12:15 GMT, which is expected to show 150K new private sector jobs added in July, similar to June’s figure.
Therefore, the US dollar decline, driven by dovish Fed expectations, could boost the EUR/USD pair. Meanwhile, the stable Fed and positive ADP data may further support the euro's strength against the dollar.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.08142, up 0.01% on the day. The 4-hour chart indicates a mixed sentiment, with the pair hovering just below the pivot point at $1.08358. Immediate resistance is identified at $1.08701, followed by $1.09025 and $1.09288.
On the downside, immediate support is seen at $1.08021, with further support levels at $1.07772 and $1.07533.
Technical indicators provide a neutral to slightly bearish outlook. The Relative Strength Index (RSI) is at 42, suggesting the pair is not in overbought or oversold territory, but leaning towards bearishness.
The 50-day Exponential Moving Average (EMA) stands at $1.08530, indicating a potential resistance level if prices attempt to rally.
The recommended trade setup is to enter a sell position below $1.08264, with a take profit target at $1.07765 and a stop loss at $1.08720. This strategy aims to capitalize on the bearish momentum while managing risk effectively.
Overall, the technical outlook for EUR/USD suggests a cautious approach with a slight bearish bias below the pivot point at $1.08358. A sustained move above immediate resistance at $1.08701 could signal a shift towards a bullish trend, targeting higher resistance levels.
Conversely, a break below immediate support at $1.08021 may reinforce the bearish trend, aiming for lower support levels.
In conclusion, traders should monitor the EUR/USD closely for potential bearish opportunities below $1.08358, while remaining vigilant for any signs of a trend reversal at key resistance levels.
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GBP/USD Price Analysis – July 31, 2024
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trades at $1.08142, up 0.01%, indicating mixed sentiment on the 4-hour chart.
- Immediate resistance levels: $1.08701, $1.09025, $1.09288; support levels: $1.08021, $1.07772, $1.07533.
- RSI at 42, 50-day EMA at $1.08530, suggesting a sell below $1.08264, take profit at $1.07765, and stop loss at $1.08720.
EUR/USD is trading at $1.08142, up 0.01% on the day. The 4-hour chart indicates a mixed sentiment, with the pair hovering just below the pivot point at $1.08358. Immediate resistance is identified at $1.08701, followed by $1.09025 and $1.09288.
On the downside, immediate support is seen at $1.08021, with further support levels at $1.07772 and $1.07533.
Technical indicators provide a neutral to slightly bearish outlook. The Relative Strength Index (RSI) is at 42, suggesting the pair is not in overbought or oversold territory, but leaning towards bearishness.
The 50-day Exponential Moving Average (EMA) stands at $1.08530, indicating a potential resistance level if prices attempt to rally.
The recommended trade setup is to enter a sell position below $1.08264, with a take profit target at $1.07765 and a stop loss at $1.08720. This strategy aims to capitalize on the bearish momentum while managing risk effectively.
Overall, the technical outlook for EUR/USD suggests a cautious approach with a slight bearish bias below the pivot point at $1.08358. A sustained move above immediate resistance at $1.08701 could signal a shift towards a bullish trend, targeting higher resistance levels.
Conversely, a break below immediate support at $1.08021 may reinforce the bearish trend, aiming for lower support levels.
In conclusion, traders should monitor the EUR/USD closely for potential bearish opportunities below $1.08358, while remaining vigilant for any signs of a trend reversal at key resistance levels.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08362
Take Profit – 1.07957
Stop Loss – 1.08608
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$405/ -$246
Profit & Loss Per Mini Lot = +$40/ -$24
EUR/USD Price Analysis – July 29, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its downward movement, hovering around 1.0833 and reaching an intra-day low of 1.0826. This decline is primarily driven by the renewed strength of the US dollar, which has gained traction amid uncertainty surrounding the Federal Reserve's upcoming monetary policy decision.
Meanwhile, the losses in the EUR/USD pair was further bolsoterd by the sluggish economic growth in the Eurozone, especially in Germany, and expectations of rate cuts by the European Central Bank (ECB). These elements have collectively exerted significant pressure on the EUR/USD pair.
Impact of US Dollar Strength and Fed Policy on EUR/USD Outlook
On the US front, the broad-based US dollar strengthened, with the US Dollar Index (DXY) climbing to around 104.50.
The Federal Reserve is anticipated to maintain interest rates at 5.25%-5.50%, and investors are closely monitoring the Fed's monetary policy statement and Chair Jerome Powell’s press conference for indications of potential rate cuts.
Market experts speculate that the Fed may signal rate cuts in September, given the progress in reducing inflation toward the 2% target and rising concerns about the labor market. Recent data reflects easing inflation worries, with the Q2 GDP Price Index falling to 2.3% from 3.1%.
Although the June core Personal Consumption Expenditures (PCE) Price Index edged up to 2.6%, expectations for rate cuts persist.
Therefore, the strengthening US dollar and potential Fed rate cuts are likely to pressure the EUR/USD pair further. As the US dollar gains strength and inflation concerns ease, the EUR/USD may continue its downward trend.
EUR/USD Decline Amid Eurozone Inflation Uncertainty and Fed Decision
On the EUR front, the major currency pair is declining due to uncertainty ahead of the Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) for July and the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
The Eurozone inflation data will reveal if the market’s expectation of two more rate cuts by the European Central Bank (ECB) this year is justified.
Some ECB officials support these cuts due to a weak economy and the belief that inflation will drop to 2% next year. The expected annual inflation rates are 2.3% for overall prices and 2.8% for core prices.
Additionally, German Finance Minister Christian Lindner has introduced tax cuts to help boost spending and investment, as Germany is facing reduced demand and slower economic growth.
Therefore, the EUR/USD pair is falling as investors anticipate the Eurozone’s inflation data and the Fed’s policy decision. Uncertainty over ECB rate cuts and slower inflation, coupled with German tax relief measures, is contributing to the pair's decline.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.08369, up 0.04% on the 4-hour chart. The pivot point is set at $1.0836, a critical level for determining future price movements. Immediate resistance levels are $1.0877, $1.0912, and $1.0949. On the downside, immediate support is at $1.0806, followed by $1.0777 and $1.0753.
The Relative Strength Index (RSI) is at 40, suggesting a neutral market with no clear overbought or oversold signals. This indicates that the market could move in either direction, influenced by upcoming economic data and market dynamics.
The 50-day Exponential Moving Average (EMA) stands at $1.0878, acting as a higher resistance level. If prices move above this EMA, it could indicate a shift towards a bullish trend. Conversely, staying below this EMA would reinforce a bearish outlook.
Given the current technical indicators, a cautious approach is advisable. Selling opportunities might arise below the pivot point of $1.0836, with a potential take profit level at $1.07765. A stop loss should be placed at $1.08720 to manage risk. The RSI's neutral position means traders should watch for any significant moves that could signal a clearer trend direction.
In summary, while EUR/USD shows some potential for upward movement, key resistance and support levels will be crucial in determining the next significant price actions.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point: $1.0836 is crucial for future price movements.
- RSI: Neutral at 40, indicating no clear trend direction.
- 50-day EMA: Resistance at $1.0878 suggests caution for bullish moves.
EUR/USD is currently trading at $1.08369, up 0.04% on the 4-hour chart. The pivot point is set at $1.0836, a critical level for determining future price movements. Immediate resistance levels are $1.0877, $1.0912, and $1.0949. On the downside, immediate support is at $1.0806, followed by $1.0777 and $1.0753.
The Relative Strength Index (RSI) is at 40, suggesting a neutral market with no clear overbought or oversold signals. This indicates that the market could move in either direction, influenced by upcoming economic data and market dynamics.
The 50-day Exponential Moving Average (EMA) stands at $1.0878, acting as a higher resistance level. If prices move above this EMA, it could indicate a shift towards a bullish trend. Conversely, staying below this EMA would reinforce a bearish outlook.
Given the current technical indicators, a cautious approach is advisable. Selling opportunities might arise below the pivot point of $1.0836, with a potential take profit level at $1.07765. A stop loss should be placed at $1.08720 to manage risk.
The RSI's neutral position means traders should watch for any significant moves that could signal a clearer trend direction.
In summary, while EUR/USD shows some potential for upward movement, key resistance and support levels will be crucial in determining the next significant price actions.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08264
Take Profit – 1.07765
Stop Loss – 1.08720
Risk to Reward – 1: 1
Profit & Loss Per Standard Lot = +$499/ -$456
Profit & Loss Per Mini Lot = +$49/ -$45
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is trading at $1.08577, up 0.12%, with the pivot point at $1.0836.
- RSI at 48 indicates a neutral sentiment, suggesting potential for movement in either direction.
- The 50-day EMA at $1.0883 acts as a resistance level, reinforcing the cautious bullish outlook above $1.0836.
The EUR/USD currency pair is currently trading at $1.08577, reflecting a modest increase of 0.12%. Analyzing the 4-hour chart, several key levels and technical indicators emerge, providing insight into potential price movements.
The pivot point is identified at $1.0836, serving as a crucial level that could determine the pair's next direction. Immediate resistance is observed at $1.0877, with subsequent resistance levels at $1.0912 and $1.0949. These levels represent potential barriers for any upward movement in the short term.
On the downside, immediate support is found at $1.0806, followed by $1.0777 and $1.0753. These support levels are critical in preventing further declines and could act as bounce points if the pair faces selling pressure.
The Relative Strength Index (RSI) stands at 48, suggesting a neutral market sentiment. An RSI near 50 indicates neither overbought nor oversold conditions, implying potential for movement in either direction based on market catalysts.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0883, slightly above the current price. The proximity of the price to the 50 EMA suggests potential resistance if the pair attempts to climb higher. The 50 EMA is a commonly watched indicator that traders use to gauge medium-term trend direction.
In conclusion, the technical outlook for EUR/USD remains cautiously bullish above the pivot point of $1.0836. Traders are advised to consider buying above $1.08354, with a take profit target of $1.08869 and a stop loss at $1.08120.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.08354
Take Profit – 1.08869
Stop Loss – 1.08120
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$515/ -$234
Profit & Loss Per Mini Lot = +$51/ -$23
EUR/USD Price Analysis – July 26, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair gained positive traction, turning bullish around the 1.0857 level and reaching an intra-day high of 1.0861.
This upward movement is primarily due to the weakening US dollar, which has been under pressure amid expectations for Federal Reserve (Fed) rate cuts later this year. Softer-than-expected US inflation figures have intensified these expectations, potentially leading to lower interest rates and further weakening the dollar.
However, the EUR/USD pair's gains may be limited by ongoing economic challenges in the Eurozone. Germany's PMI data recently showed contraction, and the European Central Bank (ECB) is anticipated to cut rates further, which could also put downward pressure on the Euro.
Additionally, the Euro faces headwinds from a significant tax relief package, impacting its overall value.
Weak German Economy and ECB Rate Cut Expectations Pressure EUR/USD Pair
On the EUR front, the Eurozone is facing a tough time as Germany, its largest economy, struggles with economic contraction. In July, the German Hamburg Commercial Bank (HCOB) Composite Purchasing Managers Index (PMI) fell to 48.7 from 50.4, signaling a decline in private sector activity.
Dr. Cyrus de la Rubia, HCOB’s Chief Economist, warned that Germany’s economy is shrinking, particularly due to a sharp drop in manufacturing output. This weak performance is affecting the Euro, compounded by expectations of two more rate cuts by the European Central Bank (ECB).
ECB officials are considering these cuts to boost the economy, especially as inflation is projected to hit 2% by 2025.
Meanwhile, Germany’s 30 billion euros tax relief plan shows the government’s concern over low demand. The upcoming Eurozone Harmonized Index of Consumer Prices (HICP) data will be crucial in determining the timing of future ECB rate cuts.
Therefore, the weak German economy and anticipated ECB rate cuts are likely to weaken the Euro. As Germany struggles with contraction and inflation expectations shift, the EUR/USD pair could see downward pressure, with the Euro losing ground against the US dollar.
Impact of US Inflation Data and Fed Rate Cut Speculation on EUR/USD Pair
On the US front, the broad-based US dollar has been losing its momentum as investors await the core Personal Consumption Expenditures (PCE) price index data for June, set for release at 12:30 GMT.
Economists forecast that inflation will ease slightly to 2.5% year-over-year in June from 2.6% previously, with a steady 0.1% monthly increase. This data will play a crucial role in shaping market expectations for Federal Reserve (Fed) rate cuts this year.
Currently, there is strong speculation that the Fed will cut rates in September. If inflation figures are softer than expected, it would likely support the case for these cuts, while stubbornly high inflation could weaken this expectation.
The US dollar has shown subdued performance as traders remain cautious, knowing that the Fed is expected to keep its key rates steady at 5.25%-5.50% during its July 31 meeting.
Therefore, the subdued US dollar and anticipated Fed rate cuts could benefit the EUR/USD pair. Softer inflation data might reinforce expectations for September rate cuts, potentially strengthening the Euro against the Dollar.
EUR/USD - Technical Analysis
The EUR/USD currency pair is currently trading at $1.08577, reflecting a modest increase of 0.12%. Analyzing the 4-hour chart, several key levels and technical indicators emerge, providing insight into potential price movements.
The pivot point is identified at $1.0836, serving as a crucial level that could determine the pair's next direction. Immediate resistance is observed at $1.0877, with subsequent resistance levels at $1.0912 and $1.0949. These levels represent potential barriers for any upward movement in the short term.
On the downside, immediate support is found at $1.0806, followed by $1.0777 and $1.0753. These support levels are critical in preventing further declines and could act as bounce points if the pair faces selling pressure.
The Relative Strength Index (RSI) stands at 48, suggesting a neutral market sentiment. An RSI near 50 indicates neither overbought nor oversold conditions, implying potential for movement in either direction based on market catalysts.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0883, slightly above the current price. The proximity of the price to the 50 EMA suggests potential resistance if the pair attempts to climb higher. The 50 EMA is a commonly watched indicator that traders use to gauge medium-term trend direction.
In conclusion, the technical outlook for EUR/USD remains cautiously bullish above the pivot point of $1.0836. Traders are advised to consider buying above $1.08354, with a take profit target of $1.08869 and a stop loss at $1.08120.
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EUR/USD Price Analysis – July 24, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to gain positive traction, remaining under pressure around the 1.0845 level and hitting an intra-day low of 1.0825.
The downward trend can be attributed to the preliminary Eurozone Hamburg Commercial Bank (HCOB) PMI report for July, which showed an unexpected easing in composite numbers. This was driven by a slowdown in both manufacturing and services, putting pressure on the EUR/USD pair.
The weak economic activity in the Eurozone is expected to boost expectations of more rate cuts by the European Central Bank (ECB).
Furthermore, the renewed strength of the US dollar, supported by recent developments in the US presidential elections, was another key factor affecting the EUR/USD pair.
However, growing expectations that the Federal Reserve may begin a rate-cutting cycle in September could limit gains in the US dollar and help the EUR/USD pair mitigate its losses.
Eurozone Economic Weakness and ECB Rate Cut Expectations Pressure EUR/USD Pair
On the EUR front, the ECB is expected to cut interest rates two more times by the end of the year due to weak economic activity in the Eurozone. The preliminary Eurozone Hamburg Commercial Bank (HCOB) Purchasing Managers’ Index (PMI) report for July showed a slowdown in both manufacturing and services.
The HCOB Composite PMI decreased to 50.1, just above the 50 threshold that separates expansion from contraction, falling short of investor expectations of 51.1. Manufacturing contracted to 45.6, while services expanded at a slower pace of 51.9.
This in turn, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that weak demand in Germany's manufacturing sector is dragging down overall private sector output.
In contrast, French service providers increased activity due to preparations for the Olympic Games.
Despite this, input prices in the services sector rose at a faster rate, and selling prices remained steady, offering no relief to ECB policymakers. Traders currently expect the ECB to deliver two more rate cuts this year, aligning with some ECB officials' views.
Therefore, the weak Eurozone economic data and expectations for additional ECB rate cuts pressure the EUR/USD pair. Despite increased activity in French services, the overall slowdown and rising input prices contribute to the euro's struggles against the stronger US dollar.
Strong US Dollar and Anticipated Fed Rate Cuts Impact EUR/USD Pair
On the US front, the broad-based US dollar managed to stop its bearish bias and regained its positive traction, edging higher near a weekly high of around 104.50.
This strength is due to investor interest ahead of the US presidential elections in November, with market experts predicting a win for Donald Trump despite the Democratic nomination of Vice President Kamala Harris. Additionally, the US dollar's performance is influenced by anticipation of significant upcoming economic data releases.
On the data front, investors are closely watching the preliminary US S&P Global PMI data for July, which is expected to show modest expansion in both manufacturing and services.
The main triggers for the US dollar this week will be the preliminary Q2 GDP and the Personal Consumption Expenditures (PCE) Price Index data, scheduled for release on Thursday and Friday, respectively. The US economy is projected to have grown by 1.9% in Q2, up from the previous 1.4%.
Investors are particularly focused on the core PCE inflation data, the Federal Reserve’s preferred measure of inflation, to assess the timeline for potential interest rate cuts. Markets currently anticipate these rate cuts to begin in September.
Therefore, the strong US dollar, driven by investor interest ahead of the presidential elections and anticipation of significant economic data releases, pressures the EUR/USD pair. However, potential Federal Reserve rate cuts in September may limit the pair's losses.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.0828, reflecting the latest market movements. The 4-hour chart highlights crucial technical levels that traders should monitor closely. The pivot point is positioned at $1.0847, serving as a central level around which price action is likely to oscillate.
Immediate resistance levels are identified at $1.0878, $1.0912, and $1.0949. These levels represent potential selling points where the market may encounter resistance if it attempts to rise.
On the downside, immediate support levels are found at $1.0806, $1.0777, and $1.0753. These levels are critical as they indicate potential areas where buying interest may emerge, preventing further declines.
The Relative Strength Index (RSI) is currently at 25, suggesting that the market is in oversold territory. This indicates a potential for a rebound if buyers step in at lower levels.
The 50-day Exponential Moving Average (EMA) stands at $1.0894, acting as a dynamic resistance level that traders should watch for potential price reactions.
Given the current technical setup, the recommendation is to sell below $1.08474. The take profit level is set at $1.08068, providing a reasonable downside target. A stop loss is advised at $1.08724 to manage risk, protecting against potential upward reversals.
In conclusion, the technical outlook for EUR/USD suggests a bearish sentiment below the pivot point of $1.0847.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trading at $1.0828; pivot point at $1.0847.
- Immediate resistance levels: $1.0878, $1.0912, $1.0949; support levels: $1.0806, $1.0777, $1.0753.
- RSI at 25, 50-day EMA at $1.0894; sell below $1.08474 with a stop loss at $1.08724.
EUR/USD is currently trading at $1.0828, reflecting the latest market movements. The 4-hour chart highlights crucial technical levels that traders should monitor closely. The pivot point is positioned at $1.0847, serving as a central level around which price action is likely to oscillate.
Immediate resistance levels are identified at $1.0878, $1.0912, and $1.0949. These levels represent potential selling points where the market may encounter resistance if it attempts to rise.
On the downside, immediate support levels are found at $1.0806, $1.0777, and $1.0753. These levels are critical as they indicate potential areas where buying interest may emerge, preventing further declines.
The Relative Strength Index (RSI) is currently at 25, suggesting that the market is in oversold territory.
This indicates a potential for a rebound if buyers step in at lower levels. The 50-day Exponential Moving Average (EMA) stands at $1.0894, acting as a dynamic resistance level that traders should watch for potential price reactions.
Given the current technical setup, the recommendation is to sell below $1.08474. The take profit level is set at $1.08068, providing a reasonable downside target. A stop loss is advised at $1.08724 to manage risk, protecting against potential upward reversals.
In conclusion, the technical outlook for EUR/USD suggests a bearish sentiment below the pivot point of $1.0847.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08474
Take Profit – 1.08068
Stop Loss – 1.08724
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$406/ -$250
Profit & Loss Per Mini Lot = +$40/ -$25