EUR/USD Price Forecast: Can the Pair Break Above $1.1164 as Dollar Weakens?
During the European trading session, the EUR/USD currency pair showed a modest recovery, inching up to 1.1113 and briefly touching an intra-
During the European trading session, the EUR/USD currency pair showed a modest recovery, inching up to 1.1113 and briefly touching an intra-day high of 1.1132.
This upward move was largely driven by a softening US dollar, which retreated as traders shifted their attention to Federal Reserve Chair Jerome Powell’s anticipated speech at the Jackson Hole Symposium. The US dollar had shown some resilience earlier, but it resumed its downward trend due to growing caution ahead of Powell’s remarks.
Impact of Federal Reserve’s Expected Guidance on EUR/USD
Despite a stronger-than-expected US S&P Global PMI report for August—highlighting robust growth in the services sector alongside a slight contraction in manufacturing—the US dollar weakened. Market participants are closely watching Powell’s speech for insights into the Federal Reserve’s stance on future rate cuts. If Powell hints at a more accommodative monetary policy, the dollar could face additional downward pressure, potentially bolstering the EUR/USD pair.
5 Minutes 3⭐ BEARISH SIGNAL 🐻 on $EUR/USD
FXEntry Price: $1.11179 pic.twitter.com/zw8L2UQflC
— Flux Charts Forex (@Forex_FLUX) August 23, 2024
Federal Reserve officials have indicated that a rate cut in September might be appropriate if upcoming economic data aligns with current expectations. This dovish sentiment is anticipated to influence the EUR/USD, possibly leading to further euro strength against a weakened dollar.
Anticipated ECB Rate Cuts and Their Influence on EUR/USD Outlook
On the European side, the euro’s gains are somewhat tempered by the expectation of further rate cuts from the European Central Bank (ECB) in September. Concerns about the Eurozone’s economic outlook and slower wage growth have fueled these expectations.
The latest Eurozone HCOB PMI report for August showed an uptick in business activity, but lingering concerns about weak foreign demand, particularly from Germany, suggest that this positive momentum might be short-lived.
With the possibility of additional ECB rate cuts looming, the EUR/USD pair’s upside may be limited. “The potential for further rate cuts by the ECB is a key factor that could cap the euro’s gains,” noted a senior analyst at Reuters. Traders are now awaiting Powell’s speech for fresh direction, weighing its impact against the ongoing economic developments in both the US and Europe.
#EURUSD rises towards 1.1125
🇪🇺Gains in EUR are being limited by dovish ECB comments
📊The market expects another rate cut in the September meeting
#EURUSD🔼 0.05% (1d)RW: Forex trading involves significant risk. #Tradingdotcom #MarketUpdates
— Trading.com (@tradingdotcom) August 23, 2024
EUR/USD Price Forecast
Currently, the EUR/USD is steady at $1.11136, marking a slight increase of 0.01% for the day. The pair is trading within a narrow range, with the pivot point at $1.11092 serving as a crucial level. On the 4-hour chart, immediate resistance is noted at $1.11644, followed by $1.11910 and $1.12238. Immediate support lies at $1.10769, with further support at $1.10491 and $1.10194.
The RSI is neutral at 58, suggesting that momentum could shift in either direction. The 50-day EMA at $1.10510 provides robust support, indicating that the pair maintains a bullish bias above this level. A break above $1.11644 could push the EUR/USD higher, targeting $1.11910. Conversely, failure to hold above the $1.11092 pivot point might lead to a decline toward the $1.10769 support level.
Conclusion: Traders should watch the $1.11092 pivot point closely. A break above $1.11644 may signal further gains, while a drop below $1.10769 could prompt a deeper correction.
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