EUR/USD Price Analysis – July 15, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward momentum, hovering around the $1.0912 mark and reaching an intra-day high of 1.0920.
This upward movement was primarily driven by a weaker US dollar, which lost ground amid growing expectations that the Federal Reserve (Fed) may start cutting interest rates starting from its September meeting.
Additionally, the Euro gained strength as investors showed increased interest ahead of the European Central Bank (ECB) policy meeting, further supporting the EUR/USD pair's rise.
Impact on EUR/USD Pair Amidst Fed Rate Cut Expectations
On the US front, the broad-based US dollar slipped to around 104.00 as markets anticipate a Federal Reserve interest rate cut in September. This outlook stems from easing inflation pressures and a tepid labor market, as highlighted by slower-than-expected growth in June's Consumer Price Index.
Investors are closely watching Fed Chair Jerome Powell's upcoming speech at 16:30 GMT for clues on the timing of potential rate cuts.
These developments are likely to influence the EUR/USD pair, potentially weakening the dollar against the euro if the Fed signals a dovish monetary policy stance in response to economic conditions.
Impact of ECB Monetary Policy on EUR/USD Pair
On the EUR front, Investors are closely eyeing the upcoming ECB monetary policy meeting, where the central bank is anticipated to keep its key rates unchanged.
The focus lies on signals regarding potential future rate cuts, following the ECB's recent decision on June 6 to reduce interest rates for the first time since it began tightening policy back in July 2022.
This move underscores ongoing economic conditions and will shape market expectations for the euro's performance against major currencies like the US dollar. Traders are keenly assessing the ECB's stance on monetary policy adjustments amid prevailing global economic uncertainties.
Therefore, the ECB's expected unchanged rates and hints on future cuts could bolster the euro against the dollar, depending on how markets interpret the ECB's outlook compared to the Fed's dovish stance.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.08884, marking a slight uptick of 0.12%. The 4-hour chart delineates crucial levels that traders should consider. The pivot point is established at $1.0909, a key indicator for potential directional changes.
Immediate resistance is identified at $1.0909, with subsequent resistance levels at $1.0924 and $1.0940. These levels are critical as they mark potential barriers to upward movement.
On the downside, immediate support is found at $1.0860, followed by $1.0844 and $1.0824, indicating zones where prices might find stability or bounce back if downward pressure intensifies.
Technical indicators offer further insight into the current market sentiment. The Relative Strength Index (RSI) is at 58, suggesting a moderately bullish trend without overbought conditions.
This indicates room for potential upward movement. The 50-day Exponential Moving Average (EMA) is positioned at $1.0852, serving as a dynamic support level that could help prevent further declines if the price stays above this average.
Given these observations, the outlook for EUR/USD suggests a cautiously bullish sentiment above the pivot point of $1.0909. An entry price to buy above $1.08806 could be considered, aiming for a take profit at $1.09092, with a stop loss set at $1.08651 to effectively manage risk.
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