Daily Technical Analysis by OnEquity

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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Daily Technical Analysis EUR/USD: Pair Seeks Support on Downward Pressure
The EUR/USD pair tilted lower during the day on Tuesday, with intraday bids at two-week lows before the day’s session closed near 1.1050. Price action remains limited as markets are bracing for a final US Non-Farm Payrolls release this week, although a missed Purchasing Managers’ Index figure appears to have revived fears of an impending recession.

Significant European data remains limited in the first half of the trading week, and on Thursday, Fiber traders may be busy with a pan-European retail sales update for July, followed by U.S. labor data estimates ahead of Friday’s NFP jobs release.

July pan-European retail sales are expected to rebound slightly, with an estimated 0.1% y/y compared to last period’s -0.3% decline. Gross Domestic Product figures for Europe will also be released on Friday, with growth expected to remain unchanged from last quarter’s figures.

The ISM U.S. manufacturing PMI for August came in below estimates at 47.2 points, under the market’s consensus forecast of 47.5 points. Although there was a slight rebound from July’s multi-month low of 46.8, it failed to galvanize the markets, giving investors the opportunity to pull back from a recent bullish tilt.

Friday’s nonfarm payrolls report will be released, marking the last round of key U.S. jobs data before the Federal Reserve announces its latest interest rate decision on September 18. The Non-Farm Payrolls report is expected to set the tone for market estimates regarding the depth of a Fed rate cut, as investors assume the start of a new rate-cutting cycle this month.

EUR/USD Daily Technical Analysis for September 4th:​

FFiber prices have once again plunged into short-term technical hurdles, although traders continue to emerge in an effort to maintain balanced bidding, even if they fail to achieve a bullish recovery. EUR/USD set a 13-month high just above 1.1200 early last week, and a short-term pullback in the greenback’s moves has traders scrambling to maintain the bullish role on the charts.

The pair continues to trade north of the 200-day exponential moving average (EMA) at 1.0845. At the same time, despite remaining in the bullish zone, EUR/USD continues to face an increasingly sharp bearish pullback as shorts concentrate their positions on targets just above the 50-day EMA at 1.0956.

 

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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.

 

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Daily Technical Analysis EUR/USD: Pair Moves Towards 1.100 Ahead of This Week’s Fed Meeting
The EUR/USD has started the week on a positive note and has returned to around 1.1090 in the early hours of the Asian session on Monday. Investors are focused on the long-awaited policy decision by the Federal Reserve this week. Markets continue to debate the size of the potential rate cut..

According to CME’s FedWatch tool, markets are forecasting about a 48.0% chance of a 25 basis point rate cut from the Fed at its meeting on September 17th and 18th. The chance for a 50 basis point rate cut has increased to 52.0% from 50.0% a day ago.

Investors will be paying close attention to the FOMC press conference for guidance on U.S. interest rates. If Fed Chairman Jerome Powell signals a more aggressive easing approach, there could be downward pressure on the U.S. dollar, potentially boosting the EUR/USD pair.

Gabriel Makhlouf, a member of the European Central Bank (ECB) Governing Council and governor of the Central Bank of Ireland, said Friday that the central bank still operates in a “very uncertain environment” and will be guided by data in making future monetary policy decisions. Makhlouf stressed that the ECB is not committed to a specific rate path, although it remains “determined to ensure” that inflation in the eurozone returns to the 2% target “in an appropriate manner.”

The Rabobank survey notes that the ECB announced its second rate cut of the cycle last week, with another cut expected before the end of the year. The latest ECB staff projections also show a downward revision to eurozone growth. While the Fed’s easing forecasts may weaken the dollar, Rabobank notes that unfavorable eurozone fundamentals could limit the upside potential of the EUR/USD pair in the near future.

EUR/USD Daily Technical Analysis for September 16th:​

Although the pair has retraced in the short term from the 13-month highs of around 1.1200 seen at the end of August, the downward pressure is facing significant challenges from Fibonacci buyers, with the pair resisting a pullback to the 50-day Exponential Moving Average (EMA) at 1.0984.

Close attention should be paid to this week’s events on the USD side to assess their impact on the pair. The market is currently divided over the potential magnitude of the interest rate cuts.