Daily Technical Analysis EUR/USD by OnEquity

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Bearish Momentum May Last
The EUR/USD is expected to remain under pressure with signs of moderation in the coming days due to the amount of data to be released this week, especially today, Wednesday, when the Eurozone PPI and the Federal Reserve’s interest rate decision and subsequent statement will be released. The EUR/USD has lost ground this week from its July high of 1.0948 and has now had three straight weeks of declines.

s for the outlook for the currency pair, we expect a slight pullback to near the 50-day moving average at 1.0811 over the next few days. Additionally, this is the possible location for the 38.2% Fibonacci retracement from the high to the 2024 low.

In technical terms, a break of the EUR/USD exchange rate support level at 1.0780 would give the bears control over the trend.

This week, both the Federal Reserve and the European Central Bank will be in the spotlight, especially today, Wednesday, as inflation-related figures were released yesterday, primarily from Germany.

With the European Central Bank expected to cut interest rates again in September, it would take a major new data release to have a long-lasting impact on the Euro. Conversely, this week’s volatility will likely be driven by the dollar. The Federal Reserve will make its policy decision later today. Additionally, it seems that there will be no change in US rates.

Expectations are for an expansionary stance in line with estimates for the first interest rate cut in September. Currently, the market seems predisposed to such an outcome, which would translate into the dollar rising if the Fed leaves any doubt about whether it will begin its rate-cutting cycle in September. Additionally, the Fed is expected to continue its strategy of highlighting concerns that keeping interest rates unchanged for an extended period could significantly impact the labor market.

This is consistent with the Fed’s statement that it believes it can afford to cut US interest rates before inflation falls to its 2% target. On Friday, the most notable event for the dollar will be the release of the US employment report. If the data falls below expectations, the market will anticipate further easing of Fed monetary policy in the months ahead, which will weigh on the dollar.

July US nonfarm payrolls are expected to show an increase of 178,000 jobs, with the unemployment rate at 4.1%. In June, the figure was higher than expected, at +206,000 jobs.

EUR/USD Daily Technical Analysis for July 31st:​

There is no change in our technical view on the performance of the euro against the dollar. The overall trend remains bearish, and a break of the 1.0800 support is feasible, which will consolidate control by the bears, potentially leading to further losses.

Technical indicators will move towards strong oversold levels on the daily chart if the euro/dollar price approaches the support levels of approximately 1.0735 and 1.0600. For the same time frame, the psychological resistance 1.1000 will continue to have the most relevance for the upward shift of the overall trend.

 

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Ahead of 1.0900 as Weak NFP Data Weighs on the Dollar

The EUR/USD extended its rally near the 1.0915 level at the start of the Asian session on Monday. The price rise is favored by the weakening of the dollar after poor employment data in the United States. Market traders will pay special attention to the German HCOB Purchasing Managers’ Index (PMI) along with the Eurozone PMI, in addition to the ISM Services PMI in the United States, which will be released later today and is expected to affect the EUR/USD pair, especially on the dollar side.

The slowdown in employment growth and the increase in the US unemployment rate heightened fears of a deeper economic slowdown and weighed on the dollar (USD) across the board. Nonfarm payrolls (NFP) increased by 114,000 in July, down from 179,000 in June and below forecasts of 185,000, according to data released Friday by the Labor Department. Additionally, the unemployment rate rose to 4.3%, its highest level since October 2021.

Despite some fears of a U.S. recession, Federal Reserve Chairman Jerome Powell indicated last week that the central bank’s confidence in the “solid” economy and easing inflation data is helping to provide further confidence that the U.S. central bank can cut interest rates very soon. Financial markets, for their part, have fully discounted a rate cut of less than 25 basis points for the three meetings remaining this year, according to CME’s FedWatch tool.

Across the ocean, high inflation and sustained growth in the Eurozone economy caused market expectations to increase for more interest rate cuts this year. The headline HICP rose to 2.6% y-o-y during July, above economists’ consensus of 2.4%. The underlying HICP, which does not take into account volatiles such as food, energy, alcohol, and tobacco, rose at a steady 2.9% compared to expectations of 2.8%.

EUR/USD daily technical analysis for August 5th:​

For EUR/USD, the break of the 1.0800 support will continue to be the key point for the bears to move noticeably lower. The ISM Services PMI in the US may extend this downtrend. That said, nearby support levels will be 1.0720 and 1.0600. From the latter level, technical indicators may degrade to oversold levels. On the other hand, the psychological resistance at 1.1000 will remain the most important if the bulls want to regain trend control of the pair.

 

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EUR/USD declines, fails to hold 1.10 level
The EUR/USD pared its recent gains and retreated from the 1.1000 level on Tuesday as markets continue to digest a recent rebalancing in Forex market flows. Investors have possibly regained equilibrium and have once again returned to betting on an increase in the pace of rate cuts by the Federal Reserve in September. Tuesday’s euro zone economic data had a slight impact on the market and Wednesday’s data will be released on the average level.

Pan-European retail sales contracted by -0.3% y-o-y in June, below estimates of 0.1% and down from a revised 0.5% in the year-ago period. German industrial production figures will be released on Wednesday, which are expected to rebound to 1% month-on-month growth in June from the previous period’s contraction of -2.5%.

According to CME’s FedWatch tool, investors are looking at a two-to-one chance of a double 50 basis point cut when the Federal Open Market Committee announces its interest rate decision on September 18. Currently, with the cut in place, the rate markets see zero chance of the Fed keeping rates unchanged for this year, with a total of four estimated quarter-point cuts for the latter part of the year.

During this week, watch for any news from Fed policymakers pointing to the desirability of accelerating interest rate cuts in the United States. This would boost the euro.

EUR/USD Daily Technical Analysis for August of 7th:​

According to the daily chart, the uptrend in the EUR/USD remains in place. Selling from above is the best trading strategy. Obviously, selling above the psychological resistance at 1,000 is the best. The trend of the euro against the dollar today will be conditioned by the prospects of future signs of economic recession in the United States that may be announced by the heads of central banks around the world. On the other hand, and according to the daily chart, the 1.0820 support level will continue to be relevant for the bears to regain control of the trend.

 

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Daily Technical Analysis EUR/USD: Rallies Above 1.0900, Upside Limited by Middle East Tensions
This week, investors will be focused on new inflation data, such as the Producer Price Index (PPI) and the Consumer Price Index (CPI) in the United States on Tuesday and Wednesday. Retail sales and the University of Michigan consumer confidence index will also be released this week. Core PPI inflation and headline CPI inflation remain steady around 3% y/y, and investors expect the data to support expectations for a rate cut by the Federal Reserve.

That said, the EUR/USD has halted its streak of four straight days of losses and is trading near 1.0920 in the Asian session on Monday. Traders are also awaiting preliminary Eurozone Q2 Gross Domestic Product (GDP) data, which is due on Wednesday.

The euro, a risk-sensitive currency, could come under pressure due to the scale of geopolitical tensions in the Middle East. On Sunday, Israel’s Defense Minister Yoav Gallant told U.S. Defense Secretary Lloyd Austin that Iran’s military actions appear to be preparing for a full-scale attack on Israel. This action would be in retaliation for the reported assassination of Hamas leader Ismail Haniyeh in the Iranian capital in late July, according to Barak Ravid, editor of Axios.

Regarding the dollar, investors will likely focus on U.S. producer inflation data due Tuesday and consumer inflation figures due Wednesday. Traders are looking for confirmation that price growth remains stable.

Expectations of an interest rate cut by the Fed in September could put pressure on the US dollar, which could support the EUR/USD. According to CME’s FedWatch tool, it indicates a 51.5% chance of a 25 basis point rate cut at next month’s meeting, a considerable increase from the 26% chance recorded last week.

EUR/USD Daily Technical Analysis for August 12th:​

The EUR/USD pair remains in a neutral pattern, and a bullish bias would be reinforced if it breaks back above the psychological resistance at 1.1000. On the other hand, according to the behavior on the daily chart, a return to the 1.0820 support zone will be important for the bears to regain control of the trend. Consequently, it is still preferable to sell the currency pair at higher levels.

 

[OnEquity]

Daily Technical Analysis EUR/USD: The pair moves amid dollar weakness
EUR/USD rose on Tuesday, supported by a broad-based weakening in U.S. dollar bids as U.S. Producer Price Index (PPI) inflation appeared to be cooling faster than expected. Traders continue to await EU Gross Domestic Product (GDP) growth figures, due in early European trading hours on Wednesday. Meanwhile, investors will turn their attention to upcoming U.S. Consumer Price Index (CPI) inflation figures as risk appetite expands in recovery mode.

Eurozone GDP for the second quarter is expected to remain at previous figures of 0.3% quarter-on-quarter and 0.6% year-on-year. Although no change is expected, a sharp deviation in either direction could generate a new round of risk-off selling in Euro markets if the number is low, or reinforce the current bullish stance if growth shows signs of picking up.

U.S. CPI inflation is expected to continue showing signs of cooling in July, with markets anticipating core CPI for the year ending in July to decline to 3.2% from 3.3% last year. Headline CPI is expected to follow the same trend, with median market estimates predicting a decline to 2.9% y-o-y from 3.0% previously.

U.S. PPI inflation fell to 2.2% y-o-y in July, down from the 2.3% estimate and further down from the revised 2.7% in the previous period. Core PPI inflation also fell to 2.4% y-o-y in July, down from an estimated 2.7% and further down from 3.0%. The continued decline in U.S. inflation pressure reinforced risk appetite during the U.S. stock market session, and market bets on a double 50 basis point cut by the Federal Reserve in September increased to 55%, according to CME’s FedWatch tool.

EUR/USD Daily Technical Analysis for August 14th:​

Despite recovering on Tuesday, EUR/USD remains stuck below the previous week’s high, just above 1.1000. Bullish momentum may continue to drive intraday price action higher, but technical fragility poses a real risk as EUR/USD struggles to gain long-term traction ahead of the 200-day exponential moving average (EMA) near 1.0820.