EURUSD Heads for 1.1150 After the Bullish Breakout

This week, the EUR/USD pair continues to show resilience, building on last week’s breakout above 1.10. The pair is now approaching the December 2023 high at 1.1150, where the 200-weekly SMA also provides resistance. After breaking through the 2024 high at 1.1043, the Euro has benefited from a wave of risk appetite, capitalizing on a weakening USD and softer US economic data, while largely ignoring the ongoing economic downturn in Europe. The final reading of the July Eurozone CPI consumer inflation came in as expected, further supporting the current status quo of this pair.

Eurozone July CPI Report

Additionally, the Eurozone GDP grew by 0.3% in the second quarter, signaling modest economic growth. However, industrial production in June fell by 0.1%, a less optimistic figure that highlights the significant challenges the Eurozone economy faces. These mixed signals raise concerns about the long-term stability of the Eurozone’s economic recovery.

EUR/USD Chart Weekly – The 100 SMA Has Been BrokenChart EURUSD, W1, 2024.08.19 19:25 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

While the Euro is currently riding high, market attention is shifting towards the US, where the Federal Reserve is expected to begin a monetary easing process in September. The US economy is showing signs of weakness, which has contributed to the recent decline in the USD and the Euro’s strength. As the Fed’s decisions unfold, they are likely to play a crucial role in the direction of the EUR/USD pair moving forward.

The German central bank Bundesbank reported a 3.1% increase in negotiated pay in Q2, a significant drop from the 6.2% observed in Q1. They also noted that base effects are expected to cause a “temporary rise” in German inflation by the end of the year, which could further delay the country’s economic recovery.

German Final Consumer Price Index Released by Destatis – 20 August 2024

  • Germany July PPI MoM +0.2% vs +0.2% expected
  • June PPI MoM was +0.2%

Breaking down the data:

  • Energy prices rose by 0.5%.
  • Intermediate products saw a price increase of 0.2%.
  • The prices of durable consumer items and capital goods remained unchanged.
  • Overall consumer goods prices decreased by 0.1% in July.
  • Excluding energy, producer prices experienced a modest 0.1% increase from June to July.

EUR/USD Live Chart

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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