Daily Price Outlook

The EUR/USD currency pair is currently showing a strong bearish trend, with its value hovering around the mid-1.0800s. This means that the Euro is losing value compared to the US Dollar. Howeve, there are a few reasons behind this downward movement. Firstly, there is a growing belief that the European Central Bank (ECB) will decide to keep interest rates unchanged in September. This expectation is not good news for the Euro because higher interest rates tend to make a currency more attractive to investors.

Secondly, there is uncertainty about what the Federal Reserve (Fed) in the United States will do with its interest rates in the future. This uncertainty is actually benefiting the US Dollar, as investors tend to favor currencies from countries with higher interest rates. Therefore, the Euro is weak right now because the ECB might not raise interest rates, while the US Dollar is gaining strength due to uncertainty about what the Fed will do next. This combination is pushing the EUR/USD pair lower.

Euro Faces ECB Caution and Slow Growth Amidst Dollar's Inflation Edge

It is worth noting that the Euro is currently under pressure due to cautious statements from the European Central Bank (ECB). Prominent ECB officials, including Isabel Schnabel and Luis de Guindos, have hinted at the possibility of keeping interest rates unchanged at the September policy meeting. This shift in sentiment comes as Euro Zone growth has fallen short of expectations, despite the ongoing discussion about the need for further rate hikes.

Adding to this, recent Euro Zone data reveals a slowdown in underlying price growth for August, which further strengthens expectations that the ECB will maintain its current interest rates. In contrast, the United States has seen higher inflation, with the Personal Consumption Expenditures (PCE) Price Index rising to 3.3% YoY in July. Consequently, the Euro is facing downward pressure against the US Dollar as investors lean towards the Dollar's potentially more attractive interest rates and economic outlook.

US Inflation Inches Up, but Economic Indicators Signal Caution

Furthermore, the Core PCE Price Index, which the Federal Reserve closely monitors for inflation, increased by 4.2% annually, slightly higher than the 4.1% in June. The report also highlighted a 0.2% growth in Personal Income and a substantial 0.8% rise in Personal Spending, the most significant jump since January. Hence, this data leaves room for the possibility of the Fed implementing another 25 basis points rate hike before the year's end, bolstering the US Dollar and putting downward pressure on the EUR/USD currency pair.

However, recent reports, such as the ADP employment figures and the second estimate of Q2 GDP, suggest a potential slowdown in the robust US economy. This wil likely prompt the Fed to adopt a less aggressive stance, curbing the strength of the US Dollar. Investors are also cautious, awaiting the influential NFP jobs report later today, which will likely provide significant direction to the overall market.

EUR/USD - Technical analysis

The EUR/USD pair decisively breached the 1.0880 threshold, closing below it yesterday, signaling a return to its prevailing bearish trajectory visible on the chart. In forthcoming sessions, the pair appears poised to further descend, potentially testing the 1.0785 marker. A break beneath this level could set the stage for a deeper decline, targeting 1.0700.

Today's outlook is predominantly bearish, further reinforced by the downward pressure exerted by the EMA50. However, it's pertinent to highlight that any move above 1.0880 could neutralize this bearish outlook, potentially paving the way for recovery efforts. The trading range for today is anticipated to span from a support at 1.0750 to a resistance at 1.0900.

Daily Price Outlook

The EUR/USD pair demonstrated significant upward momentum in the previous session, successfully breaching the 1.0880 level and advancing towards the 1.0955 threshold. This movement indicated an endeavor to regain ground in the upcoming trading sessions. However, the influence of stochastic negativity is currently introducing a certain bearish inclination.

Given this situation, the conflicting technical indicators prompt us to adopt a neutral stance until clearer signals emerge regarding the next directional movement. These signals could manifest through either a breach of the 1.0955 level or a breakdown below the 1.0880 support. It's important to note that a continuation of the ascent beyond this resistance could drive the price towards 1.1030 as the subsequent favorable target. Conversely, a breach of the support holds the potential to reignite the primary bearish trend, with the next target positioned at 1.0785.

Anticipated trading activities for today are expected to transpire within the range of support at 1.0830 and resistance at 1.1010.

EUR/USD - Trade Idea

Entry Price – Buy Above 1.08932

Take Profit – 1.09840

Stop Loss – 1.08489

Risk to Reward – 1: 2

Profit & Loss Per Standard Lot = +$908/ -$443

Profit & Loss Per Micro Lot = +$90/ -$44

Daily Price Outlook

Despite renewed expectations of more interest rate hikes by the European Central Bank (ECB), the EUR/USD currency pair struggled to extend its previous upward momentum, experiencing a loss of around 0.54% on the day and trading around 1.0865. However, this reversal can be attributed to mixed Eurozone inflation data, which contributed to the decline of the currency pair. Meanwhile, the US Dollar is making a recovery, leading the USD Index (DXY) to bounce back from its recent two-week low around 103.00 and test the 103.50 level. This resurgence of the Greenback is considered a significant factor that has been putting pressure on the EUR/USD currency pair.

Eurozone Inflation Data and its Impact on EUR/USD

According to data released by Eurostat, the annual Eurozone Harmonised Index of Consumer Prices (HICP) remained steady at 5.3% in August, matching the July figure and surpassing the anticipated 5.1% growth. However, Core HICP inflation slightly declined to 5.3% year-on-year in August from July's 5.5%, aligning with market expectations.

On a monthly basis, the HICP for the Eurozone increased by 0.6% in August, a notable shift from the 0.1% drop in July and better than the expected -0.1%. Core HICP inflation also rebounded to 0.3% during this period, in contrast to the expected 0.3% decrease and July's -0.1% figure. It's crucial to note that the European Central Bank's inflation target is 2.0%.

These HICP numbers significantly impact market expectations for the ECB's interest rate policy. Markets are estimating a 30% chance of a 25 basis point ECB rate hike to 4.0% in September. Due to this mixed Eurozone inflation data, the Euro is facing downward pressure, with EUR/USD trading at 1.0865, down 0.54% on the day.

Impact of Core PCE Price Index Release on EUR/USD Pair

At the US front, the Bureau of Economic Analysis (BEA) is set to release the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, on August 31 at 12:30 GMT. Forecasts suggest a 0.2% monthly increase in July, matching June's figures, while the annual Core PCE Price Index is expected to rise slightly to 4.2% from June's 4.1%. Meanwhile, the headline PCE Price Index is anticipated to grow 0.2% on a monthly basis, with the annual PCE figure expected to rise to 3.3%.

Hence, the Core PCE Price Index's impact on EUR/USD depends on the data. If it's higher than expected, the USD may strengthen, pressuring EUR/USD down. Conversely, a weaker figure could weaken the USD and offer support to EUR/USD. However, market reactions could be short-lived as investors await the crucial August jobs report later in the week.

EUR/USD - Technical analysis

The EUR/USD pair demonstrated significant upward momentum in the previous session, successfully breaching the 1.0880 level and advancing towards the 1.0955 threshold. This movement indicated an endeavor to regain ground in the upcoming trading sessions. However, the influence of stochastic negativity is currently introducing a certain bearish inclination.

Given this situation, the conflicting technical indicators prompt us to adopt a neutral stance until clearer signals emerge regarding the next directional movement. These signals could manifest through either a breach of the 1.0955 level or a breakdown below the 1.0880 support. It's important to note that a continuation of the ascent beyond this resistance could drive the price towards 1.1030 as the subsequent favorable target. Conversely, a breach of the support holds the potential to reignite the primary bearish trend, with the next target positioned at 1.0785.

Anticipated trading activities for today are expected to transpire within the range of support at 1.0830 and resistance at 1.1010.

Daily Price Outlook

The EUR/USD pair has successfully reached our anticipated target at 1.0880, encountering strong resistance at this level. This resistance is a result of the convergence of the previously breached 61.8% Fibonacci correction level with the resistance of the corrective bearish channel. Additionally, clear negative signals have emerged through the stochastic indicator.

Consequently, we hold the view that there is a valid possibility of a bearish rebound, leading to potential negative price movement in the upcoming trading sessions. The focus is on testing the 1.0785 level as a primary target. It's noteworthy that surpassing the levels of 1.0880 to 1.0890 would negate the projected decline, potentially allowing for further gains toward the 1.0955 region. The projected trading range for today is anticipated to lie between the support at 1.0785 and the resistance at 1.0925.

The anticipated trend for today is bearish.

EUR/USD - Trade Idea

Entry Price – Buy Above 1.08503

Take Profit – 1.09279

Stop Loss – 1.08001

Risk to Reward – 1: 1.55

Profit & Loss Per Standard Lot = +$776/ -$502

Profit & Loss Per Micro Lot = +$77/ -$50

Daily Price Outlook

The EUR/USD currency pair prolonged its upward trend and remained well bid around 1.0890 marks during the Asian session on Wednesday. However, the reason for its bullish bias can be attributed to the retreating US Dollar, prompted by the downbeat economic data from the United States on Tuesday. Meanwhile, there is no news from the European Central Bank (ECB) about potential rate decisions post-summer. Thereby, the traders await the upcoming releases of economic data from the US and Eurozone, seeking a clearer understanding of inflation scenarios in both economies.

US Economic Updates and Fed Outlook

Elsewhere, US Consumer Confidence for August dipped to 106.1 from the earlier 114.0, missing the expected 116.0. Also, in July, US JOLTS Job Openings dropped to 8.827 million, down from 9.165 million prior, contrary to the expected rise to 9.465 million. Market watchers predict the US Federal Reserve (Fed) will delay rate hikes until its September meeting. The CME's FedWatch Tool shows only an 11.5% chance of a rate hike in September.

Thus, this stance is putting downward pressure on the US dollar's value. Furthermore, at the Jackson Hole Symposium, Fed Chair Jerome Powell said their decision on the next rate hike will rely on economic data.

As a result, EUR/USD traders are waiting for new economic data from the US and Eurozone to better understand inflation in both regions. They're especially interested in US ADP Employment Change and preliminary Gross Domestic Product Annualized (Q2), which will come out later. In the Eurozone, they're keeping an eye on Consumer Sentiment, the German preliminary Consumer Price Index (CPI), and the Harmonized Index of Consumer Prices.

Eurozone Data and EUR/USD Outlook

At home, Spain saw a 2.6% rise in August's yearly inflation, while Italy's Consumer Confidence slipped to 106.5 and fell to -16 in the broader euro area. Later, all eyes will be on Germany's advanced inflation data this month. This information will likely impact the EUR/USD pair. If Germany's inflation exceeds expectations, the euro might strengthen against the US dollar. Conversely, if the figures disappoint, it could put downward pressure on the euro relative to the dollar.

EUR/USD - Technical analysis

The EUR/USD pair has successfully reached our anticipated target at 1.0880, encountering strong resistance at this level. This resistance is a result of the convergence of the previously breached 61.8% Fibonacci correction level with the resistance of the corrective bearish channel. Additionally, clear negative signals have emerged through the stochastic indicator.

Consequently, we hold the view that there is a valid possibility of a bearish rebound, leading to potential negative price movement in the upcoming trading sessions. The focus is on testing the 1.0785 level as a primary target. It's noteworthy that surpassing the levels of 1.0880 to 1.0890 would negate the projected decline, potentially allowing for further gains toward the 1.0955 region. The projected trading range for today is anticipated to lie between the support at 1.0785 and the resistance at 1.0925.

The anticipated trend for today is bearish.

Daily Price Outlook

The EURUSD currency pair currently hovers around the 1.0785 mark. It's observed that the stochastic exhibits a measured waning of its bullish momentum, concurrently with the EMA50 exerting downward pressure on the pair.

Considering these indicators, there's a heightened propensity for the pair to revert to its overarching bearish trajectory, as delineated within the bearish channel depicted on the chart. A definitive breach below the current level could signal a trajectory towards the 1.0700 benchmark. Conversely, surpassing the 1.0835 threshold might catalyze intraday advancements, with a potential aim to approach the 1.0880 mark before any subsequent retracements.

For today, the anticipated trading range is set between the 1.0720 support and 1.0880 resistance levels.

EUR/USD - Trade Idea

Entry Price – Buy Above 1.08033

Take Profit – 1.08406

Stop Loss – 1.07726

Risk to Reward – 1: 1.2

Profit & Loss Per Standard Lot = +$373/ -$307

Profit & Loss Per Micro Lot = +$37/ -$30

Daily Price Outlook

Despite the European Central Bank's (ECB) adoption of a more hawkish stance, the EUR/USD pair is still struggling. While it initially managed to breach the 1.0800 level once again, it concluded the week in the red for the fifth consecutive time. This means that even though the ECB is adoption a hawkish stance, the Euro is not gaining much ground against other currencies.

However, the reason for its bearish trajectory can be attributed to the heightened expectations of another interest rate hike by the Federal Reserve in the year 2023. This development has pushed the US dollar higher, subsequently contributing to the losses observed in the EUR/USD pair.

ECB's Inflation Focus and Rate Hike Caution: Potential Impact on EUR/USD Pair

It is worth noting that during the Jackson Hole Symposium, ECB President Christine Lagarde emphasized their ongoing battle with inflation. She underlined the essential role of central banks in maintaining economic stability by keeping interest rates at elevated levels until the targeted 2% inflation rate is achieved. Simultaneously, ECB's Martins Kazaks cautioned against prematurely stopping rate hikes, emphasizing potential risks.

In simpler terms, the ECB is prioritizing the prevention of rapid price escalation, which is why they are opting to maintain higher interest rates for the time being. Thus, this news holds the potential to exert a positive influence on the EUR/USD pair.

Fed Chairman Powell Signals Potential Interest Rate Increase: Impact on EUR/USD Trend

Across the ocean at the Jackson Hole Economic Symposium, Fed Chairman Jerome Powell stated their readiness for more interest rate increases if needed. This stance, driven by strong growth and job conditions, could make the US dollar more attractive against the Euro, particularly if data remains positive. However, Philadelphia Fed President Patrick Harker disagreed, favoring stable rates to gauge their economic impact.

Meanwhile, Cleveland Fed President Loretta Mester supported higher rates to curb inflation, citing an improving economy. Furthermore, the UoM's Consumer Confidence Index dropped in August, potentially strengthening the US dollar further, as Powell's willingness to raise rates based on growth could enhance the dollar's appeal. This contributed to the EUR/USD pair's downward trend.

EUR/USD - Technical analysis

Daily Price Outlook

The EUR/USD currency pair failed to maintain its recent upward trend and dipped back to around 1.0850 on Thursday. However, the reason for its downward trend can be attributed to the decline in business confidence to 96 in France during August, which added to the Euro's challenges and contributed to the EUR/USD pair declines.

Furthermore, the broad-based US dollar regained its strength, which was seen as another key factor that kept the EUR/USD pair lower. Looking forward, the market's attention is now focused on today's data releases, especially Initial Jobless Claims and Durable Goods Orders, which are anticipated to impact currency movements.

US Dollar Stability and Focus on Jackson Hole Symposium:

As mentioned above, the US Dollar has managed to find some stability after stepping back from its recent peak, which saw it reach around 104.00 earlier this week. The USD Index (DXY) is currently hovering around the 103.50 level, showing that there is still some uncertainty in the US financial markets. Looking ahead, all eyes are on the start of the Jackson Hole Symposium.

Investors are anticipating Federal Reserve Chairman Jerome Powell's upcoming speech on Friday. However, there is a renewed debate about the Fed's commitment to sticking with a more cautious monetary policy for an extended period. This discussion has arisen due to the surprising strength of the US economy, even though there has been some softening in the job market and recent reports of lower inflation.

The EUR/USD pair may experience increased volatility as investors closely monitor developments. If Powell signals a shift in the Fed's monetary stance, it could strengthen the US dollar, potentially pushing the EUR/USD pair lower. However, any hints of continued caution from the Fed may support the euro, leading to a possible uptick in the pair's value.

ECB Divisions and Economic Data Impacting EUR/USD:

At the same time, there are disagreements within the European Central Bank (ECB) Council about whether to continue tightening measures beyond the summer. These internal divisions are causing worries about the strength of the Euro. On the economic data front, the eurozone had a relatively quiet period, with French Business Confidence dropping to 96 in August.

Meanwhile, in the US, investors are awaiting data on Initial Jobless Claims, the Chicago Fed National Activity Index, and July's Durable Goods Orders. These various factors collectively play a role in shaping the dynamics of the EUR/USD currency pair.

EUR/USD - Technical analysis

The EUR/USD currency pair is currently trading around the 1.0880 level, maintaining its position just below this level. Notably, the EMA50 intersects with this resistance, lending further reinforcement to its significance. Meanwhile, the stochastic indicator is displaying a clear loss of its positive momentum, signaling overbought conditions at present.

Given these circumstances, we are inclined to anticipate a bearish correction in the upcoming trading sessions, leading to a resumption of the prevailing bearish trend. It is noteworthy that our target for this movement is situated at 1.0785.

However, a breach of the 1.0880 level would negate the anticipated decline and potentially initiate a recovery, potentially resulting in further intraday gains. The projected trading range for today is positioned between the support level of 1.0770 and the resistance level of 1.0920.

Daily Price Outlook

The EUR/USD currency pair is currently trading around the 1.0880 level, maintaining its position just below this level. Notably, the EMA50 intersects with this resistance, lending further reinforcement to its significance. Meanwhile, the stochastic indicator is displaying a clear loss of its positive momentum, signaling overbought conditions at present.

Given these circumstances, we are inclined to anticipate a bearish correction in the upcoming trading sessions, leading to a resumption of the prevailing bearish trend. It is noteworthy that our target for this movement is situated at 1.0785.

However, a breach of the 1.0880 level would negate the anticipated decline and potentially initiate a recovery, potentially resulting in further intraday gains. The projected trading range for today is positioned between the support level of 1.0770 and the resistance level of 1.0920.

EUR/USD - Trade Idea

Entry Price – Sell Below 1.08748

Take Profit – 1.08022

Stop Loss – 1.09285

Risk to Reward – 1: 13

Profit & Loss Per Standard Lot = +$726/ -$537

Profit & Loss Per Micro Lot = +$72/ -$53

Daily Price Outlook

The EUR/USD currency pair managed to gain positive momentum for the second consecutive day on Tuesday, climbing back above the 1.0900 mark during the Asian trading session. However, the recent upward movement can be attributed to a statement made by the European Central Bank (ECB) Chief Economist, Philip Lane, on Friday. He mentioned that the Euro Zone economy is expected to continue growing and is unlikely to face a significant or prolonged recession.

Lane's remarks led to a reduction in the inversion of the German yield curve and supported the possibility of the ECB implementing further policy tightening. This, in turn, has provided a strength to the shared currency and contributed to the EUR/USD pair gains. Moreover, the minor weakness in the US Dollar has also contributed to the favorable conditions for the EUR/USD pair.

Factors Influencing the USD and Their Impact on the EUR/USD Pai

The USD Index (DXY) is currently lower than its highest point since July 12. This is because traders are expecting the Federal Reserve to pause its trend of increasing interest rates in September. However, the US economy is still showing strength, leaving room for the possibility of another slight rate increase of 0.25% by the end of this year. This potential rate hike could prevent significant drops in the US Dollar's value.

Investors widely believe that the Fed will maintain relatively high interest rates for a considerable period. This conviction is keeping the yields on US Treasury bonds at elevated levels. Remarkably, the yield on the key 10-year US government bond recently hit a 15-year high.

In the meantime, investors are moving cautiously due to a general feeling of uncertainty. This has led to the US Dollar being seen as a safe-haven currency. Currently, it's staying slightly above an important moving average. This cautious attitude among investors might discourage them from taking overly aggressive actions regarding the EUR/USD pair.

Market Events to Watch and Their Impact on EUR/USD Trading

Investors are cautious ahead of speeches by Fed Chair Jerome Powell and ECB President Christine Lagarde at the Jackson Hole Symposium, along with upcoming preliminary PMI numbers from the Euro Zone and the US, which provide insights into economic performance and potential central bank actions.

Besides this, attention turns to Tuesday's release of Euro Zone Current Account figures and US data on Existing Home Sales and the Richmond Manufacturing Index. These, coupled with US bond yields and overall investor risk sentiment, will influence the short-term trading dynamics of the EUR/USD pair.

EUR/USD - Technical analysis

The EUR/USD currency pair concluded the previous day's trading session above the 1.0880 level, and as the new day commences, it carries forward an additional bullish inclination. This momentum has prompted a test of the EMA50, which forms a minor resistance point at 1.0915. This development indicates a potential for achieving projected gains within the intraday scope, with an initial target set at 1.0955. It's worth noting that surpassing this level could serve as a catalyst for the price to progress toward the next positive station at 1.1030.

Given the current trajectory, a continued bullish bias is anticipated for the present trading session. It is essential to highlight that any breach of the 1.0880 level would potentially curtail the projected upward movement, causing the price to revert to a correctional bearish phase. The projected trading range for the day is expected to fall between the support level at 1.0850 and the resistance level at 1.1000.