Daily Technical Analysis EUR/USD by OnEquity

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.

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.

Daily Technical Analysis EUR/USD: the pair is moving towards the 1.1050 level.

The EUR/USD extended its gains for the second session in a row, touching the 1.1030 level in Asian trading on Monday. The pair’s rise could be the result of increased chances of an interest rate cut in September by the Federal Reserve.

Last week, U.S. economic data showed that retail sales beat estimates, while the Producer Price Index (PPI) and Consumer Price Index (CPI) showed that inflation is on a downward trajectory. Additionally, U.S. housing starts fell nearly 6.8% in the month of July to 1.238 million units, following a 1.1% increase in June, which appears to be the lowest level since 2020. This decline has heightened fears about the resilience of the economy, particularly in light of recent more relaxed reports on inflation and labor.

Federal Reserve Bank of San Francisco President Mary Daly remarked Sunday that the central bank should adopt an approach that is gradual if borrowing costs are to be reduced, according to. Financial Times. Daly expressed her opposition to economists’ concerns that the U.S. economy is close to a sharp slowdown that would justify rapid interest rate cuts.

Similarly, Chicago Fed Board of Governors President Austan Goolsbee said central bankers should be cautious about maintaining a tightening-based policy longer than previously thought. Although it is not known whether the Fed will cut interest rates next month, failure to do so could be harmful to the labor market, according to CNBC.

In Europe, investors expect the European Central Bank to gradually cut interest rates. Monetary policymakers have been hesitant to commit to a new path of rate cuts because they are concerned that price pressures could reaccelerate.

EUR/USD Daily Technical Analysis for August 19th:
The pair is currently trading above the psychological resistance at 1.1000 will serve as support for bull control in the broader trend. Consequently, if gains increase to 1.1060 and 1.1120 levels, technical indicators may move to strong overbought levels. Above those levels, it may be best to sell. On the other hand, according to the behavior on the daily chart, the 1.0820 support level will remain perhaps the most relevant to end the uptrend.

Daily Technical Analysis EUR/USD: The Pair Rises Nearly 1% This Week Ahead of Jackson Hole

The most important event this week is the Federal Reserve’s Jackson Hole symposium, where Fed Chairman Jerome Powell is expected to speak publicly on Friday. At the same time, the market will focus on whether expectations of a 100 basis point rate cut by the central bank this year will be confirmed. Another factor that could become more favorable for the Euro and detrimental to the Dollar in the coming days, weeks, and months is the latest developments in the US election polls, which now seem to indicate that the Democratic Party candidate, Kamala Harris, is ahead of former President and Republican Party candidate Donald Trump in several key swing states.

On Tuesday, EUR/USD rose 0.4% and broke above 1.1100 for the first time since December 2023, reaching a new high for 2024. EUR/USD has now been in positive territory for three straight days and appears to be on track for a 1% gain since the market opened on Monday.

Early Thursday, the results of the pan-European Purchasing Managers’ Index (PMI) survey will be released, with the August Eurozone manufacturing and services PMIs expected to hold steady at 45.8 and 51.9, respectively.

Thursday will bring the results of the U.S. Purchasing Managers’ Index (PMI) business activity survey, as well as the start of the annual Jackson Hole Symposium, which will extend through the weekend. The minutes of the Fed’s latest meeting are due to be released on Wednesday, although markets will generally be fully focused on Thursday’s releases, looking for reasons or signals to move the market.

The U.S. manufacturing PMI is expected to hold steady at 49.6 for the month of August, while the services PMI is expected to drop one point to around 54.0 from 55.0. The start of the Jackson Hole Symposium is expected to draw much of investors’ attention on Thursday, although it is worth noting that Friday’s appearance by Fed Chairman Jerome Powell will likely indicate the overall market outlook for the week ahead.

EUR/USD Daily Technical Analysis for August 21th:
EUR/USD has made a new high for 2024, breaking above 1.3050, as markets sell the US dollar in the short term on a general level, rather than for any specific reason related to the single currency’s rise in price. It must be noted that EUR/USD has closed in the green for all but one of the last seven trading days and is in a bullish zone above the 200-day exponential moving average (EMA) at 1.0835.

However, the long-term consolidation range is strong on the technical charts, and a sharp reversal could trigger a move back below 1.1000.

Daily Technical Analysis EUR/USD: Moves Up to Around 1.1200 on Powell’s Conservative Fed Stance

The EUR/USD is extending its gains for the second session in a row, trading around 1.1190 during the Asian session on Monday. This rise in EUR/USD follows the weaker US dollar after the Fed Chairman’s dovish-sounding speech at the Jackson Hole Symposium last Friday.

Fed Chairman Jerome Powell said, “The time has come to tighten policy.” Although Powell did not indicate when the rate cuts will begin or their extent, markets are anticipating that the Fed will announce a rate cut of about 25 basis points at next month’s meeting.

Similarly, Philadelphia Fed President Patrick Harker stressed on Friday the need for the Fed to lower interest rates gradually. Conversely, Chicago Fed President Austan Goolsbee emphasized that monetary policy is at its most restrictive and that the Fed is focused on fulfilling its employment mandate.

Regarding the eurozone, Olli Rehn, a member of the European Central Bank’s Governing Council, said on Friday that slowing inflation and a weak economy in the zone strengthen the case for lower borrowing costs next month, according to Bloomberg. Growth estimates for Europe, particularly in the manufacturing sector, are highly subdued, further strengthening the case for a rate cut in September.

Additionally, Jane Foley, currency strategist at Rabobank, highlighted on Friday that the EUR/USD is expected to trade at 1.1200 on a three-month horizon. Foley added that the recent breakout and the start of a new Fed policy cycle seem to indicate a new trading range may be forming. However, she also stated that if key US data released in early September is stronger than market estimates, it could lead to potential pullbacks to around 1.1000 for the EUR/USD.

EUR/USD Daily Technical Analysis for August 26th:
Bids in EUR/USD remain bullish after the pair managed to bounce from the last swing low at the 200-day Exponential Moving Average (EMA) near 1.0850. In the absence of a significant break above 1.1300, investor short interest could once again push prices lower in the near term.

We will also need to closely watch how the pair trades at the start of the week following the Fed’s statements and their potential impact on Europe.

Daily Technical Analysis EUR/USD: A Deeper Upward Momentum Is Expected

The EUR/USD rose on Tuesday, benefiting from the continued easing in the markets relative to the U.S. dollar. The pair returned to recent highs after the week began with a small retracement of recent gains, although a new round of risk-on sentiment in the market pushed bids back to those levels. Despite this, EUR/USD continues to be trapped below 1.1200 as Eurozone bulls struggle to instill confidence in the Fib hike.

Fed Chairman Jerome Powell appears to have confirmed that the U.S. central bank will begin a rate-cutting cycle on September 18 during his speech last Friday at the Jackson Hole Symposium, causing market appetite to soar again.

On the euro side, the economic agenda is filled with relatively unimportant news, and Wednesday is shaping up to be a quiet session in both Europe and the United States. Investors will be watching for a speech by Christopher Waller, a member of the Federal Reserve Board of Governors, in the early hours of the U.S. session, while central bank watchers are also looking for headlines from the European Union’s Eurogroup meeting scheduled during the European session.

The European Union’s Harmonized Index of Consumer Prices inflation figures for August will be released early Friday, and Eurozone price growth is expected to fall to 2.8% year-over-year from 2.9%, as inflation pressures continue to ease, although not as quickly as European Central Bank policymakers had hoped.

Also on Thursday, U.S. gross domestic product figures for the second quarter will be released, expected to remain unchanged at 2.8% year-over-year. However, the key data of the week is the Personal Consumption Price Index for July, which is expected to rise from 2.6% year-over-year to 2.7% year-over-year and remain unchanged at 0.2% month-over-month. Market participants, motivated by hopes for rate cuts, believe that the inflation data will come in below estimates, while an above-estimated figure could create nervousness in investors’ risk appetite.

EUR/USD Daily Technical Analysis for August 28th
The EUR/USD is on track for its best monthly performance since November 2022, up more than 3.1% in the month of August alone. Despite the early pullback due to technical exhaustion this week, the Fib has managed to gain ground for four straight trading weeks and is pushing above the 200-day Exponential Moving Average (EMA) at 1.0832.

Unlike a healthy bid into bullish territory, the Fib is very vulnerable to a bearish pullback, and the absence of upside momentum could see prices pull back to the 50-day EMA at 1.0925.

Daily Technical Analysis EUR/USD: Rises to Near 1.1050 on Fed’s Dovish Tone

The EUR/USD breaks its three-day losing streak and trades around 1.1050 during the Asian session on Monday. The rise in the EUR/USD could be a consequence of the U.S. dollar’s lukewarmness following the negative sentiment surrounding the Federal Reserve. However, the July Personal Consumption Expenditures index may have supported the dollar and prevented the pair from rising further.

On Friday, the U.S. Bureau of Economic Analysis reported that the Personal Consumption Expenditures index increased by 2.5% year-over-year in July, matching the previous reading of 2.5% but below the forecast of 2.6%. On the other hand, the core PCE, which excludes volatile prices such as food and energy, increased by 2.6% year-over-year in July, in line with the previous figure of 2.6% but slightly below the consensus forecast of 2.7%.

According to CME’s FedWatch tool, markets fully anticipate at least a 25 basis point rate cut from the Fed at its meeting this month. Atlanta Fed President Raphael Bostic, one of the Federal Open Market Committee’s top hawks, signaled last week that the time may be ripe for a rate cut as a result of cooling inflation and a higher-than-expected unemployment rate.

François Villeroy de Galhau, a member of the European Central Bank’s (ECB) Governing Council, said on Friday, according to Bloomberg, that there are “good reasons” why the central bank should consider cutting interest rates in September. Villeroy de Galhau proposed action at the next meeting on September 12, noting that it would be fair and cautious to decide on a further rate cut.

EUR/USD Daily Technical Analysis for September 2nd:
After breaking its streak of losses over three straight days, it is now trading near 1.1050. It remains to be seen if the negative sentiment surrounding the Fed will become more pronounced when the stock market opens in the U.S.

The pair is likely to move more on the side of the U.S. dollar this week as the release of Non-Farm Payrolls and labor market-related data approaches. We will have to wait and see how the dollar reacts and whether oversold options are generated or if buying positions are secured.

We will see if the pair can return to higher levels this week near 1.105. A notable fact is that Labor Day is celebrated this Monday, so movement from the dollar side is likely to be minimal.

Daily technical analysis EUR/USD: EUR/USD trades below 1.100 on the back of possible ECB rate cuts

The EUR/USD is trying its best to recover last session’s losses and is trading around 1.090 during Monday’s Asian session. However, the EUR/USD’s gains could be limited as recent Eurozone inflation data has strengthened expectations of a rate cut by the European Central Bank (ECB) at its next meeting.

With headline inflation close to 2% and longer-term inflation estimates remaining around the same level, the ECB has sufficient justification to continue easing monetary policy. In addition, mixed Eurozone Gross Domestic Product data in the previous week has reinforced expectations of a possible rate cut by the ECB.

On Friday, U.S. economic data increased uncertainty about the likelihood of an aggressive rate cut by the Federal Reserve at its September meeting. The U.S. Bureau of Labor Statistics reported that nonfarm payrolls added 142,000 jobs in August, below the estimate of 160,000, although an improvement from July’s downwardly revised figure of 89,000 jobs. On the other hand, the unemployment rate fell to 4.2%, as estimated, compared to last month.

According to CME’s FedWatch tool, markets fully anticipate at least a 25 basis point rate cut by the Fed at its September meeting. The likelihood of a 50 basis point cut has declined slightly to 29.0%, down from 30.0% compared to a week ago.

Federal Reserve Bank of Chicago President Austan Goolsbee mentioned on Friday that Fed officials are beginning to align with the general market view that an interest rate tightening by the Fed is imminent, as reported by CNBC.

EUR/USD Daily Technical Analysis for September 9th:
The speculative price range for EUR/USD is 1.10050 to 1.12300.

The EUR/USD price has risen quite considerably since the end of June, although not without difficulty. Financial institutions have undoubtedly opted for a looser US Fed. However, the fear of a tightening of the Fed’s rate policy has been highlighted by the nervousness seen in many assets over the past week. Many analysts doubt a slowdown in the US economy.

Early trading this week is likely to be brisk, although if the EUR/USD manages to hold the support levels seen last week, this may be an indication that they believe the currency pair has reached a solid base and may be willing to try for slightly higher values if the ECB and Fed adapt to a more dovish stance.

Great analysis. Do you provide analysis on other FX pairs as well?

DMBrodbeck posted:
Great analysis. Do you provide analysis on other FX pairs as well?

Dear DmBrodbeck,

 Thank you for your positive report on our Daily technical analysis EUR/USD.

You check all of our analysis on hub.onequity . com

Please feel free to do so.

Best Regards,
OnEquity Team

Daily technical analysis EUR/USD: losing ground on German inflation and ECB rate cuts

The EUR/USD retreated on Tuesday after the latest inflation report in one of the eurozone’s most important economies, Germany, raised the possibility of an interest rate cut by the European Central Bank.

The EUR/USD slipped to 1.1021, as the decline in German inflation serves to fuel expectations of a 25 basis point rate cut by the ECB next Thursday.

Wall Street ended the session with positive numbers, while the U.S. dollar remains flat. European session data indicated that inflation in Germany fell to its lowest level in more than three years, as the Harmonized Index of Consumer Prices came in at 2%, the ECB’s target level.

On Thursday, the European Central Bank is forecast to lower interest rates by a quarter percentage point, although, according to analysts at BBH, the central bank would emphasize that it will keep monetary policy tight for as long as needed.

In addition, the ECB is expected to update its economic estimates, which include a downward revision to economic growth along with inflation. FX traders continue to bet on cuts between 50 and 75 basis points through the end of the year.

Looking ahead to the remainder of the week, the consumer price index for August in the U.S. is expected to be close to the Fed’s target of 2%. A lower-than-expected CPI report could increase the chances of the Fed easing interest rates by 50 basis points, even though most analysts believe that the Fed will tighten policy gradually.

CME’s FedWatch tool indicates that the chances of a 25 basis point rate cut are 70%, while the chances of a 50 basis point rate cut are 30%.

EUR/USD Daily Technical Analysis for September 10th:
In technical terms, EUR/USD is neutral with a possible bullish bias. However, a sharp break below the September 3 low at 1.1026 could open the door to further declines. Key support levels will remain exposed, such as the 1.1000 level, followed by the 50-day moving average (DMA) at 1.0958. A break of this level could lead to a test of the convergence of the 100 and 200 DMA around 1.0867/58, before heading to the August 1 low at 1.0777.

To resume the uptrend, investors would need to break above the September 9 high at 1.1091.

Daily Technical Analysis EUR/USD: Near 1.1150 with Eurozone PMI Data in Focus

The EUR/USD is holding near 1.1150 in the early hours of Monday’s session. The U.S. dollar could lose value on the back of the increased possibility of further interest rate cuts by the Federal Reserve this year, which could underpin the EUR/USD.

Last week, the Fed cut interest rates by 50 basis points, bringing them to between 4.75% and 5.00%. Policymakers also predicted an extra 75 basis points of rate cuts by the end of the year.

However, Fed Chairman Jerome Powell said at the subsequent press conference that the Fed is in no rush to ease monetary policy and emphasized that future rate cuts of 50 basis points would be the standard going forward.

Last Friday, Philadelphia Fed President Patrick Harker stated that the Fed has effectively navigated a complex economic outlook recently. Harker compared monetary policy to driving a bus, where maintaining the right speed is crucial. He also emphasized that achieving maximum employment is about more than just the number of jobs, as the quality of those jobs must also be considered.

Regarding the euro, European Central Bank President Christine Lagarde stressed during her speech last Friday that monetary policy must remain adaptable in a world that is constantly evolving. While price stability remains the core objective of monetary policy, banks must be flexible in responding to the challenges of a changing economy.

EUR/USD traders are likely to look closely at the Purchasing Managers’ Index (PMI) data for the Eurozone and Germany due for release today, Monday. The monthly PMI is used as a leading indicator of business activity, providing information on economic health and trends.

EUR/USD Daily Technical Analysis for September 23th:
EUR/USD may be in a fairly familiar range and the highs made last Wednesday may be an overly ambitious target. Traders may seek quick bets early this week, a strategy boosted by the release of US GDP figures, which could offer stronger economic data. EUR/USD is likely to rebound quite strongly over the next three days as financial institutions prepare for the US growth releases.

Also, keep in mind that U.S. employment figures will be released on October 4. Short-term investors should be ready for bullish trades that could show sudden spikes if sentiment changes this week. The coming days will test key levels as balance is contested, so risk management should remain cautious, even as day traders bet on the upside.

Daily technical analysis EUR/USD: pair regains ground on dollar weakness

EUR/USD moved away from the bearish trend and returned to touch the levels of recent highs on Tuesday, making another unsuccessful attempt at 1.1200. The euro has little reason to rise, but the general weakening of the dollar is helping to maintain the uptrend.

There is little data of interest on both sides of the Atlantic on Wednesday. Euro markets are completely absent from the economic agenda for the mid-week session. Dollar traders will have to wait until the New York market session ahead of a speech by Adriana Kugler, a member of the Federal Reserve Board of Governors, to be held at the Harvard Kennedy School in Cambridge.

Consumer confidence deteriorated across the board on Tuesday, with consumer estimates for 12-month inflation accelerating to 5.2%. Consumers likewise reported a general weakening in their estimates of six-month household financial situation, and consumer evaulations regarding overall business conditions have turned negative.

According to Coference Board Chief Economist Dana Peterson’s explanation, “Consumers’ assessments of current business conditions turned negative, while views on the current state of the labor market softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future earnings.”

Michelle Bowman, a member of the Federal Reserve Board of Governors generated the sensation the previous week by being the lone dissenter from the Fed’s almost entirely unanimous decision to cut interest rates by 50 basis points. Fed Governor Bowman alluded to a smaller, 25 basis point cut, citing concerns that the Fed may be acting prematurely before confirming that inflation continues to move down toward the 2% target range.

Bowman’s concerns notwithstanding, declining consumer confidence prompted further bets in the rate markets in favor of a further cut in November. The CME’s FedWatch tool puts the outlook for a second 50 basis point rate cut on November 7 at nearly 60%, and a more moderate 25 basis point cut at just 40%. At the beginning of the week, interest rate traders were forecasting virtually identical odds for a rate cut of 50 or 25 basis points.

EUR/USD Daily Technical Analysis for September 25th:
Unlike Tuesday’s fresh push, the Fib is still unable to break above the 1.1200 level. The daily candles are starting to show signs of congestion, and bearish pressure appears to be building as the bears are set for another test of the 50-day Exponential Moving Average (EMA) at 1.1025.

Daily technical analysis EUR/USD: bounces back to 1.1050 after Tuesday’s decline

EUR/USD fell nearly six-tenths on Tuesday, finding a slight bounce from the 1.1050 level, as geopolitical tensions and sour economic data unnerved flows regarding risk appetite, serving to bolster the dollar and dragging Fibs to their lowest prices on record in nearly a month.

Inflation in Europe as measured by the Harmonized Index of Consumer Prices declined in September at a faster pace than previously thought. Year-on-year core HICP inflation fell to 2.7% y/y, while month-on-month headline HICP inflation also fell to 1.8% during September, an even faster decline from the previous 2.2% than the estimated 1.9%.

Economic data in Europe will take a back seat for the remainder of the week as investors focus on Friday’s nonfarm payrolls report. In the lead up to Friday’s Non-Farm Payrolls report, a trickle of considerable economic data on the whole, albeit lacking in individual significance, seems to leave the picture unclear, and investors seem to be faced with somewhat lackluster releases that generally hit the bank.

For the month of September, the U.S. ISM manufacturing PMI remained at the 47.2 level for the second month in a row, below the estimated increase to 47.5. Additionally, ISM manufacturing prices paid remained at 47, below estimates. Also, ISM manufacturing prices paid declined to 48.3 down from 54.0 previously, which seems to be a sign of contraction.

Now, speaking of U.S. employment data, August JOLTS job openings increased to 8.04 million, surpassing the revised 7.7 million last period. Despite this, the increase in job openings is not likely to turn somewhat directly into further contractions, as the ISM manufacturing employment index for September declined to 43.9 from 46.0 previously, missing the estimated rise to 47.0.

In terms of geopolitical concerns, investors’ attention has focused on the Middle East after learning that Iran conducted a missile strike against Israel in response to Israel’s recent ground incursion into Lebanon. The U.S. has pledged to respond in support of Israel, which has investors wary of the possibility of an escalation of the current conflict.

EUR/USD Daily Technical Analysis for October 2nd:
Tuesday’s decline pushed the Fib towards the 50-day exponential moving average (EMA) around 1.1045. EUR/USD recorded some late-day bids, although the pair remains firmly unbalanced, completely reversing the latest upside move towards yearly highs above 1.1200. Buyers are now on the defensive and short-term momentum is increasingly tilting to the downside. The immediate short-term target for buying pressure will be to bring the buy line back above the 1.1100 level.

A figure of 144,000 jobs is anticipated. The basic rule is that any figure slightly below that number would demonstrate the need for further Fed cuts and maintain the risk-on bias around the world and in sterling. On the other hand, a significant decline could be somewhat counterproductive, as it could signal that the economy could be slipping into recession. Consequently, if the figures offer a large upside surprise, investors will be quick to bet that the Fed will slow the pace of cuts. Therefore, it is possible that they will lower interest rates. This is likely to lead to a recovery in the dollar, which would trigger a retest of the 1.1083 technical support level.

Daily Technical Analysis EUR/USD: Near Its Lowest Level Since Mid-August and Fragile at 1.0975

EUR/USD starts the week with subdued sentiment after last week’s sharp losses, bringing the pair to its lowest level since mid-August following positive U.S. jobs data on Friday. Spot prices are hovering near 1.0975 and appear vulnerable to continuing the sharp pullback from the 14-month highs around 1.1200.

The U.S. dollar is strengthening at a seven-week high as traders scaled back their expectations for any interest rate cut by the Federal Reserve in November, following stronger-than-expected U.S. jobs data. The headline NFP report revealed that 254,000 jobs were added in September, beating consensus estimates, while the unemployment rate unexpectedly dropped to 3.8%. This suggests that the labor market remains resilient, while stronger-than-expected growth in average hourly earnings has stoked inflation concerns, diminishing expectations of a more dovish stance from the Federal Reserve.

The market’s current assessment indicates a nearly 95% chance that the Fed will either keep rates unchanged or cut them by 25 basis points at its two-day policy meeting on November 7. Additionally, geopolitical risks from Middle East conflicts helped the U.S. dollar index, which compares the greenback to a basket of currencies, post its strongest weekly performance since September 2022.

Conversely, the euro remained weak amid expectations that the European Central Bank may cut rates again in October due to easing inflationary pressures and slowing economic growth.

These forecasts were reinforced by statements from François Villeroy de Galhau, a member of the ECB’s Governing Council, suggesting that the central bank could cut rates in October as weak economic growth raises the risk of inflation falling below the 2% target. This is another factor weighing on EUR/USD, increasing expectations of more short-term downside pressure. Thus, any recovery attempt could be viewed as a selling opportunity, with gains likely to fade swiftly.

EUR/USD Daily Technical Analysis for October 7th:
The EUR/USD exchange rate saw a sharp sell-off last week, and while some traders noticed minor support heading into the weekend, caution remains necessary. Friday’s slight rise may indicate a potential bullish outlook for the week ahead, but given risk-averse conditions in global markets, traders should wait for a stronger uptrend to confirm.

Technical traders believe that current support levels are crucial, and if they hold, EUR/USD could aim for the higher price levels observed last week. For EUR/USD to move higher this week, Middle East risk conditions must ease, and U.S. inflation figures need to indicate control by Thursday. For now, EUR/USD remains in a volatile and uncertain phase.

Daily Technical Analysis EUR/USD: The Pair Extends Decline Ahead of ECB Rate Decision

The EUR/USD pair continued its bearish trend on Tuesday, dropping about one-fifth of a percent and sliding below the 200-day Exponential Moving Average (EMA). The price closed below the 1.0900 level for the first time since early August. The pair is now down nearly 3% from its late September highs, which were just above the 1.1200 level.

European banks have generally reported negative impacts following the European Central Bank’s (ECB) summer rate cut. While lending standards have remained broadly unchanged and even eased for household lending, consumer credit conditions remain tight. The rebound in demand for housing loans is based solely on the expectation of further rate cuts, which means consumers are over-leveraged in the short term. Additionally, EU banks’ net interest income, due to the ECB’s policy rate decisions, has turned negative for the first time since 2022.

At a broad level, the ECB is expected to announce a quarter-point cut to the main deposit rate in its next decision on Thursday. Markets widely anticipate a 25-basis-point rate cut, with the ECB’s main refinancing rate also expected to be reduced by nearly 25 basis points to around 3.4%, down from 3.65%.

In addition to the ECB’s decision, Thursday’s session will include the release of U.S. retail sales data for September. U.S. retail sales are expected to show a 0.3% month-over-month increase, up from 0.1% in the previous month.

However, despite the euro’s weakness against the U.S. dollar and the anticipated downward momentum, it’s worth noting that the U.S. dollar has recently been losing steam. The U.S. side of the equation, which has undoubtedly been the dominant force in the currency pair’s decline, should not be overlooked. In fact, the U.S. dollar rebounded in October as markets adjusted their expectations for interest rate cuts in 2024, following stronger-than-expected U.S. economic data. Clearly, the U.S. economy does not require an urgent pace of rate cuts. Moreover, the delay in rate cuts has boosted U.S. bond yields and strengthened the dollar.

EUR/USD Daily Technical Analysis for October 16th
The EUR/USD exchange rate is expected to test the 200-day moving average as sellers anticipate Thursday’s ECB rate cut. The expectation of further ECB action has pushed the EUR/USD pair below the 1.10 level, with the next key target being the 200-day moving average at 1.08736.

There is a high likelihood that this level will be tested sometime before the end of October. From this expected support level, technical indicators could begin to move toward oversold territory. On the daily chart, the most significant support will be found at the 1.0775 level. Conversely, within the same time frame, the current bearish channel would not be broken without a return to the vicinity of the 1.1070 resistance level.

Daily Technical Analysis EUR/USD: Approaching 1.0850, Potential Drop Amid Shifting Political Forecasts

The EUR/USD may face challenges due to shifts in market estimates regarding monetary policy and interest rate outlooks.

Currently, the U.S. dollar has gained ground as the likelihood of a rate cut by the hawkish Federal Reserve in November diminishes. Meanwhile, the European Central Bank is expected to intensify its monetary policy easing to boost economic growth in the eurozone.

The EUR/USD is showing signs of stability after the previous session’s gains around the 1.0860 level in Asian trading on Monday. Earlier expectations of a 50 basis point rate cut by the Federal Reserve next month have dissipated with the latest data revealing the resilience of the U.S. economy.

According to CME’s FedWatch tool, the probability of a 25 basis point rate cut in November has increased to 99.3%, up from 89.5% last week. U.S. retail sales rose 0.4% month-over-month in September, surpassing the 0.1% increase in August and exceeding market expectations of a 0.3% rise. Additionally, initial jobless claims dropped by 19,000 during the week ending October 11, marking the largest decline in three months. The total number of claims fell to 241,000, significantly below the estimated 260,000.

Research from Rabobank indicates that the market is interpreting recent comments from ECB officials as a sign that they are increasingly comfortable with Eurozone inflation estimates. Consequently, the European Central Bank appears to be shifting its focus toward supporting growth in the region. This has fueled speculation about the possibility of a faster pace of easing, including the potential for a larger 50 basis point interest rate cut. Such a move could put pressure on the euro and weigh on the EUR/USD pair.

The euro came under downward pressure following the European Central Bank’s recent decision to cut interest rates by 25 basis points. This move follows a significant decline in inflation, which peaked at 10.6% in October 2022 and has since dropped to 1.7% in September, now below the ECB’s 2% target.

EUR/USD Daily Technical Analysis for October 21st:
The EUR/USD pair has been in a strong downtrend in recent days. It has dropped from 1.1200, its year-to-date high, to 1.0855, its lowest point since August 2.

The pair has turned the support level at 1.0980, the high from March 8, into resistance. It has also fallen below both the 50-day and 200-day moving averages.

Meanwhile, the Relative Strength Index (RSI) and Percentage Price Oscillator (PPO) have continued to decline. As a result, the pair is likely to continue falling, with the next key level to watch being 1.0770. This price level aligns with the lowest swings since October 3 of the previous year.