- US Dollar weakened modestly on Monday as market sentiment improved.
- Incoming data during the week includes Eurozone preliminary August CPI, US Core PCE, and Nonfarm Payrolls.
- The EUR/USD holds a bearish bias, hovering around the 200-day SMA.
The EUR/USD rose modestly on Monday amid a softer US Dollar, after posting its lowest daily close since mid-June on Friday following Federal Reserve Chair Jerome Powell's speech at Jackson Hole. As key economic reports lie ahead, market volatility may emerge.
The US Dollar weakened at the beginning of the week due to an improvement in market sentiment, supported by additional measures from China. Stocks in the US and Europe rose, while government bond yields declined. This context weighed moderately on the US Dollar, causing the US Dollar Index to retreat towards 104.00.
Regarding economic data during the American session, the Dallas Fed Manufacturing Index showed an improvement from -20 to -17.2, although the details were not overwhelmingly positive. The focus now turns to upcoming employment and inflation data. On Tuesday, the JOLTS Job Openings report will be released.
In terms of European data, attention is also focused on inflation reports. Eurozone countries will start releasing preliminary August Consumer Price Index (CPI) data on Wednesday. On Tuesday, the German Gfk Consumer Confidence survey is scheduled to be released.
EUR/USD short-term technical outlook
-638288497336650471.png)
The daily chart shows a clear downside bias, but technical indicators suggest some consolidation after a rebound on Friday, with the price hovering around the 200-day Simple Moving Average (SMA). Technical indicators show no strong conviction in either direction.
On the 4-hour chart, there is an attempt to rise above the 20-period SMA near 1.0820. Above that level, the next resistance stands at 1.0845, followed by 1.0865. The Euro would need to rise above 1.0880 to improve its technical outlook. However, as long as it remains below that level, the risks are tilted to the downside. The technical indicators offer mixed signals, with the Relative Strength Index (RSI) pointing to the upside and the Momentum turning south. The consolidation phase could persist, but a slide below 1.0790 could potentially push the Euro towards new lows in this scenario.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.