EUR/USD Current price: 1.0797
- United States markets will remain closed amid the celebration of the Independence Day.
- Downbeat Germany Factory Orders limit the bullish potential of the Euro.
- EUR/USD battles around 1.0800, needs to overcome the weekly high at 1.0816.
The EUR/USD pair holds on to recent gains, trading around the 1.0800 mark mid-Thursday. Investors kept selling the US Dollar throughout the European session, although at a slower pace as time went by amid renewed hopes of an upcoming interest rate cut in the United States (US). The Federal Reserve (Fed) quick-started the year anticipating three potential 25 basis point (bps) rate cuts this year, but as inflation picked up in the first quarter, policymakers backed up.
Chairman Jerome Powell became increasingly hawkish, and the odds for rate cuts diluted, down to the point that market participants believed the central bank would go for just one rate cut in 2024. However, things seem to be taking a turn. Financial markets took Fed’s Powell latest words with more optimism and are now hoping a rate cut will come in September. As a result, the USD turned lower.
Data-wise, Germany published May Factory Orders, which fell 1.6% MoM, much worse than anticipated and limiting the Euro’s bullish scope. The upcoming American session is meant to be a quiet one, as US markets will remain closed amid the Independence Day holiday.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it battles around converging 100 and 200 Simple Moving Averages (SMAs), while the 20 SMA maintains its bearish slope far below the current level. Technical indicators, in the meantime, head north within positive levels, although with limited momentum as EUR/USD trades below the weekly high at 1.816. Once the pair clears this area, the chances of a firmer rally should increase.
In the near term, and according to the 4-hour chart, the upward strength has eased, but the overall picture is bullish. EUR/USD trades above a flat 200 SMA, which provides near-term support at around 1.0785. The 20 SMA eased, but keeps heading higher below the current level, after surpassing a directionless 100 SMA. Finally, technical indicators offer uneven slopes near overbought readings, without suggesting an upcoming slide.
Support levels: 1.0740 1.0700 1.0665
Resistance levels: 1.0815 1.0850 1.0880
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 treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.