EUR/USD Price Analysis – Aug 02, 2023

Daily Price Outlook

The EUR/USD currency pair failed to stop its losing streak and experienced selling pressure as it approached the psychological resistance level of 1.1000 during the Asian session. Investors became cautious ahead of the release of United States labor market data, which will be published at 12:15 GMT. Moreover, the significant losses in S&P500 futures added to the overall cautious sentiment among investors. This apprehensive sentiment can be attributed to the recent downgrade of the United States economy by credit rating firm FITCH from 'AAA' to 'AA+'

US Dollar Index Bounces Back Despite Weak Economic Indicators

Despite the downgrade in the US economy, the US Dollar Index (DXY) bounced back after a slight dip and reached around 102.00. This surprising recovery happened even though there were disappointing economic data. US Job Openings data, which came in at 9.582 million, fell short of the previous release of 9.62 million, suggesting a potential slowdown in hiring. Furthermore, the US Manufacturing PMI contracted for the ninth month in a row, recording 46.4, lower than the expected 46.8. However, Factory Orders performed better than expected at 47.3, surpassing the forecasted 44.0.

Hence, the disappointing US economic data and the surprising rebound in the US Dollar Index (DXY) may put downward pressure on the EUR/USD currency pair.

Eyes on US Employment Data and Eurozone Inflationary Pressures

Looking forward to this Wednesday, the spotlight is on the US Employment data from ADP. Experts anticipate a slower increase of 188,000 private payrolls following June's surprising surge of 497,000 new jobs. On the other side, the Eurozone witnessed a 0.1% drop in inflation for July. However, the impressive GDP performance during the April-June quarter may prompt the ECB to consider raising interest rates.

Investors are eagerly awaiting the Retail Sales data later this week, as strong consumer spending momentum could fuel hawkish expectations for the ECB. All these factors will be closely monitored as they impact the global financial landscape.

Thus, the US Employment data and potential interest rate changes by the ECB may influence the EUR/USD currency pair, with positive US data possibly strengthening the USD against the EUR.

EUR/USD - Technical Analysis

In a captivating turn of events, EUR/USD has made a remarkable rebound, finding sturdy support in the medium-term upward trend line and the 50-day SMA. This surge in positive momentum has lifted the pair to new heights in early trading today, following its recent pursuit to discover a bottom.

Adding to the thrill, the RSI's favorable signals, after a daring venture into oversold territory, are now doubling down on the positive pressures, setting the stage for an exhilarating ride in the upcoming trading sessions.

As we buckle up for this thrilling journey, all eyes are on the target - the initial resistance at 1.1130. But, hold on tight, as this thrilling ascent is contingent upon the pivotal support level of 1.0970 holding firm.

The adventure doesn't end there! The projected trading range for today promises heart-racing action between the support level of 1.0865 and the resistance level of 1.1130.

Today's price prediction reads like a thrilling plot twist - it leans bullish! Traders are in for an adrenaline-pumping experience as they closely observe the price action and devise their trading strategies for EUR/USD.