EUR/USD Forecast: Bulls pause ahead of the next catalyst
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADEEUR/USD Current price: 1.1160
- The German IFO survey came in better than anticipated but fell short of supporting the Euro.
- The United States Durable Good Orders more than doubled expectations in July.
- EUR/USD could correct lower in the near term, but bulls hold the grip.
The EUR/USD pair eases from its recent highs at around 1.1200 despite persistent risk appetite. The pair rallied on Friday following comments from Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Symposium. Powell kept paving the way for a September interest rate cut, saying that “the time has come for policy to adjust.” As usual, he maintained a dose of caution, adding that the timing and pace of rate cuts will depend on “ incoming data, the evolving outlook, and the balance of risks.”
Nevertheless, financial markets rushed to price in lower borrowing costs in the United States (US). As a result, Wall Street posted solid gains, while the US Dollar edged lower against most major rivals. The new week, however, brought an additional dose of caution, as the US will publish later this week the Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge. Should the figures show further easing inflationary pressures, market players will likely increase bets on a 50 basis points (bps) rate cut. So far, uncertainty gyrates around the depth of the September cut.
In the meantime, Germany published the August IFO Business Climate index, which printed at 86.6, easing from 87 in July, although better than the 86.5 expected. Expectations also beat the forecast, hitting 86.8, while the assessment of the current situation eased from 87.1 to 86.5.
Across the pond, the US released July Durable Goods Orders, which rose 9.9% in the month, much better than the 4% expected. The positive US news had no relevant impact on the USD.
EUR/USD short-term technical outlook
The EUR/USD pair trades in the 1.1160 price zone following the release of American data. Technical readings in the daily chart suggest that bulls paused, but also that they retain control. The pair trades far above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining an almost vertical slope at around 1.0980. The 100 and 200 SMAs, in the meantime, advanced just marginally well below the shorter one. Finally, technical indicators hold well above their midlines, although missing directional strength.
The 4-hour chart shows that a bullish 20 SMA provides near-term support at around 1.1145, while longer moving averages retain their bullish strength, although they are below the 1.1000 mark. Technical indicators, in the meantime, ease sharply but remain above their midlines, limiting the odds for a steeper decline.
Support levels: 1.1145 1.1100 1.1065
Resistance levels: 1.1210 1.1250 1.1290
EUR/USD Current price: 1.1160
- The German IFO survey came in better than anticipated but fell short of supporting the Euro.
- The United States Durable Good Orders more than doubled expectations in July.
- EUR/USD could correct lower in the near term, but bulls hold the grip.
The EUR/USD pair eases from its recent highs at around 1.1200 despite persistent risk appetite. The pair rallied on Friday following comments from Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Symposium. Powell kept paving the way for a September interest rate cut, saying that “the time has come for policy to adjust.” As usual, he maintained a dose of caution, adding that the timing and pace of rate cuts will depend on “ incoming data, the evolving outlook, and the balance of risks.”
Nevertheless, financial markets rushed to price in lower borrowing costs in the United States (US). As a result, Wall Street posted solid gains, while the US Dollar edged lower against most major rivals. The new week, however, brought an additional dose of caution, as the US will publish later this week the Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge. Should the figures show further easing inflationary pressures, market players will likely increase bets on a 50 basis points (bps) rate cut. So far, uncertainty gyrates around the depth of the September cut.
In the meantime, Germany published the August IFO Business Climate index, which printed at 86.6, easing from 87 in July, although better than the 86.5 expected. Expectations also beat the forecast, hitting 86.8, while the assessment of the current situation eased from 87.1 to 86.5.
Across the pond, the US released July Durable Goods Orders, which rose 9.9% in the month, much better than the 4% expected. The positive US news had no relevant impact on the USD.
EUR/USD short-term technical outlook
The EUR/USD pair trades in the 1.1160 price zone following the release of American data. Technical readings in the daily chart suggest that bulls paused, but also that they retain control. The pair trades far above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining an almost vertical slope at around 1.0980. The 100 and 200 SMAs, in the meantime, advanced just marginally well below the shorter one. Finally, technical indicators hold well above their midlines, although missing directional strength.
The 4-hour chart shows that a bullish 20 SMA provides near-term support at around 1.1145, while longer moving averages retain their bullish strength, although they are below the 1.1000 mark. Technical indicators, in the meantime, ease sharply but remain above their midlines, limiting the odds for a steeper decline.
Support levels: 1.1145 1.1100 1.1065
Resistance levels: 1.1210 1.1250 1.1290
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.