EUR/USD: will it reach the level of 1.11?
EUR/USD stays below 1.0900:
The pair has defended gains in a context of a weak US Dollar (USD), despite risk aversion, which has supported the EUR/USD exchange rate.
Focus on Political and Macroeconomic Data: Attention remains on US political updates and mid-tier economic data from both the EU and the US for fresh trading impetus.
Key Technical Levels
Resistances:
First resistance at 1.0950.
Followed by the March high at 1.0980.
Psychological level at 1.1000.
Supports:
June low at 1.0668.
May low at 1.0650.
2024 annual low at 1.0600.
Fundamental Factors
Factors Affecting the US Dollar:
The USD regained momentum on Thursday, pushing the USD Index (DXY) above the 104.00 level, thanks to a rebound in US yields.
Prospects of Fed rate cuts, with the CME Group's FedWatch Tool indicating a nearly 98% probability of lower rates at the September 18 meeting and another cut expected in December.
Factors Affecting the Euro:
The ECB maintained a dovish stance at Thursday's meeting, with a slight uptick in German 10-year Bund yields.
Christine Lagarde highlighted expectations of a recovery supported by consumption, with a resilient labor market and high domestic inflation.
The ECB projects that the Harmonized Index of Consumer Prices (HICP) will reach the target in the second half of 2025.
Monetary Policy Outlook:
Ongoing debate about how many times the Fed will cut rates this year, despite the current projection of a single cut.
Prospects of Fed rate cuts occasionally support EUR/USD, reducing the gap between the Fed's and the ECB's monetary policies.
Outlook and Prospects
Short-Term Prospects: The trading dynamics for the EUR/USD pair will likely be influenced by upcoming Fed speeches and economic updates from both the US and the Eurozone. The loss of bullish momentum indicated by the 4-hour chart suggests caution, but defending key levels like the 200-SMA and the indicated supports could provide further bullish impetus.
Medium-Long Term Prospects: If the EUR/USD convincingly surpasses the 200-SMA, further gains may be on the horizon. However, failure to do so could lead to a test of lower support levels.
The pair has defended gains in a context of a weak US Dollar (USD), despite risk aversion, which has supported the EUR/USD exchange rate.
Focus on Political and Macroeconomic Data: Attention remains on US political updates and mid-tier economic data from both the EU and the US for fresh trading impetus.
Key Technical Levels
Resistances:
First resistance at 1.0950.
Followed by the March high at 1.0980.
Psychological level at 1.1000.
Supports:
June low at 1.0668.
May low at 1.0650.
2024 annual low at 1.0600.
Fundamental Factors
Factors Affecting the US Dollar:
The USD regained momentum on Thursday, pushing the USD Index (DXY) above the 104.00 level, thanks to a rebound in US yields.
Prospects of Fed rate cuts, with the CME Group's FedWatch Tool indicating a nearly 98% probability of lower rates at the September 18 meeting and another cut expected in December.
Factors Affecting the Euro:
The ECB maintained a dovish stance at Thursday's meeting, with a slight uptick in German 10-year Bund yields.
Christine Lagarde highlighted expectations of a recovery supported by consumption, with a resilient labor market and high domestic inflation.
The ECB projects that the Harmonized Index of Consumer Prices (HICP) will reach the target in the second half of 2025.
Monetary Policy Outlook:
Ongoing debate about how many times the Fed will cut rates this year, despite the current projection of a single cut.
Prospects of Fed rate cuts occasionally support EUR/USD, reducing the gap between the Fed's and the ECB's monetary policies.
Outlook and Prospects
Short-Term Prospects: The trading dynamics for the EUR/USD pair will likely be influenced by upcoming Fed speeches and economic updates from both the US and the Eurozone. The loss of bullish momentum indicated by the 4-hour chart suggests caution, but defending key levels like the 200-SMA and the indicated supports could provide further bullish impetus.
Medium-Long Term Prospects: If the EUR/USD convincingly surpasses the 200-SMA, further gains may be on the horizon. However, failure to do so could lead to a test of lower support levels.
Disclaimer
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