EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trades at $1.08142, up 0.01%, indicating mixed sentiment on the 4-hour chart.
- Immediate resistance levels: $1.08701, $1.09025, $1.09288; support levels: $1.08021, $1.07772, $1.07533.
- RSI at 42, 50-day EMA at $1.08530, suggesting a sell below $1.08264, take profit at $1.07765, and stop loss at $1.08720.
EUR/USD is trading at $1.08142, up 0.01% on the day. The 4-hour chart indicates a mixed sentiment, with the pair hovering just below the pivot point at $1.08358. Immediate resistance is identified at $1.08701, followed by $1.09025 and $1.09288.
On the downside, immediate support is seen at $1.08021, with further support levels at $1.07772 and $1.07533.
Technical indicators provide a neutral to slightly bearish outlook. The Relative Strength Index (RSI) is at 42, suggesting the pair is not in overbought or oversold territory, but leaning towards bearishness.
The 50-day Exponential Moving Average (EMA) stands at $1.08530, indicating a potential resistance level if prices attempt to rally.
The recommended trade setup is to enter a sell position below $1.08264, with a take profit target at $1.07765 and a stop loss at $1.08720. This strategy aims to capitalize on the bearish momentum while managing risk effectively.
Overall, the technical outlook for EUR/USD suggests a cautious approach with a slight bearish bias below the pivot point at $1.08358. A sustained move above immediate resistance at $1.08701 could signal a shift towards a bullish trend, targeting higher resistance levels.
Conversely, a break below immediate support at $1.08021 may reinforce the bearish trend, aiming for lower support levels.
In conclusion, traders should monitor the EUR/USD closely for potential bearish opportunities below $1.08358, while remaining vigilant for any signs of a trend reversal at key resistance levels.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08362
Take Profit – 1.07957
Stop Loss – 1.08608
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$405/ -$246
Profit & Loss Per Mini Lot = +$40/ -$24
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point: $1.0836 is crucial for future price movements.
- RSI: Neutral at 40, indicating no clear trend direction.
- 50-day EMA: Resistance at $1.0878 suggests caution for bullish moves.
EUR/USD is currently trading at $1.08369, up 0.04% on the 4-hour chart. The pivot point is set at $1.0836, a critical level for determining future price movements. Immediate resistance levels are $1.0877, $1.0912, and $1.0949. On the downside, immediate support is at $1.0806, followed by $1.0777 and $1.0753.
The Relative Strength Index (RSI) is at 40, suggesting a neutral market with no clear overbought or oversold signals. This indicates that the market could move in either direction, influenced by upcoming economic data and market dynamics.
The 50-day Exponential Moving Average (EMA) stands at $1.0878, acting as a higher resistance level. If prices move above this EMA, it could indicate a shift towards a bullish trend. Conversely, staying below this EMA would reinforce a bearish outlook.
Given the current technical indicators, a cautious approach is advisable. Selling opportunities might arise below the pivot point of $1.0836, with a potential take profit level at $1.07765. A stop loss should be placed at $1.08720 to manage risk.
The RSI's neutral position means traders should watch for any significant moves that could signal a clearer trend direction.
In summary, while EUR/USD shows some potential for upward movement, key resistance and support levels will be crucial in determining the next significant price actions.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08264
Take Profit – 1.07765
Stop Loss – 1.08720
Risk to Reward – 1: 1
Profit & Loss Per Standard Lot = +$499/ -$456
Profit & Loss Per Mini Lot = +$49/ -$45
EUR/USD Price Analysis – July 29, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its downward movement, hovering around 1.0833 and reaching an intra-day low of 1.0826. This decline is primarily driven by the renewed strength of the US dollar, which has gained traction amid uncertainty surrounding the Federal Reserve's upcoming monetary policy decision.
Meanwhile, the losses in the EUR/USD pair was further bolsoterd by the sluggish economic growth in the Eurozone, especially in Germany, and expectations of rate cuts by the European Central Bank (ECB). These elements have collectively exerted significant pressure on the EUR/USD pair.
Impact of US Dollar Strength and Fed Policy on EUR/USD Outlook
On the US front, the broad-based US dollar strengthened, with the US Dollar Index (DXY) climbing to around 104.50.
The Federal Reserve is anticipated to maintain interest rates at 5.25%-5.50%, and investors are closely monitoring the Fed's monetary policy statement and Chair Jerome Powell’s press conference for indications of potential rate cuts.
Market experts speculate that the Fed may signal rate cuts in September, given the progress in reducing inflation toward the 2% target and rising concerns about the labor market. Recent data reflects easing inflation worries, with the Q2 GDP Price Index falling to 2.3% from 3.1%.
Although the June core Personal Consumption Expenditures (PCE) Price Index edged up to 2.6%, expectations for rate cuts persist.
Therefore, the strengthening US dollar and potential Fed rate cuts are likely to pressure the EUR/USD pair further. As the US dollar gains strength and inflation concerns ease, the EUR/USD may continue its downward trend.
EUR/USD Decline Amid Eurozone Inflation Uncertainty and Fed Decision
On the EUR front, the major currency pair is declining due to uncertainty ahead of the Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) for July and the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
The Eurozone inflation data will reveal if the market’s expectation of two more rate cuts by the European Central Bank (ECB) this year is justified.
Some ECB officials support these cuts due to a weak economy and the belief that inflation will drop to 2% next year. The expected annual inflation rates are 2.3% for overall prices and 2.8% for core prices.
Additionally, German Finance Minister Christian Lindner has introduced tax cuts to help boost spending and investment, as Germany is facing reduced demand and slower economic growth.
Therefore, the EUR/USD pair is falling as investors anticipate the Eurozone’s inflation data and the Fed’s policy decision. Uncertainty over ECB rate cuts and slower inflation, coupled with German tax relief measures, is contributing to the pair's decline.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.08369, up 0.04% on the 4-hour chart. The pivot point is set at $1.0836, a critical level for determining future price movements. Immediate resistance levels are $1.0877, $1.0912, and $1.0949. On the downside, immediate support is at $1.0806, followed by $1.0777 and $1.0753.
The Relative Strength Index (RSI) is at 40, suggesting a neutral market with no clear overbought or oversold signals. This indicates that the market could move in either direction, influenced by upcoming economic data and market dynamics.
The 50-day Exponential Moving Average (EMA) stands at $1.0878, acting as a higher resistance level. If prices move above this EMA, it could indicate a shift towards a bullish trend. Conversely, staying below this EMA would reinforce a bearish outlook.
Given the current technical indicators, a cautious approach is advisable. Selling opportunities might arise below the pivot point of $1.0836, with a potential take profit level at $1.07765. A stop loss should be placed at $1.08720 to manage risk. The RSI's neutral position means traders should watch for any significant moves that could signal a clearer trend direction.
In summary, while EUR/USD shows some potential for upward movement, key resistance and support levels will be crucial in determining the next significant price actions.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is trading at $1.08577, up 0.12%, with the pivot point at $1.0836.
- RSI at 48 indicates a neutral sentiment, suggesting potential for movement in either direction.
- The 50-day EMA at $1.0883 acts as a resistance level, reinforcing the cautious bullish outlook above $1.0836.
The EUR/USD currency pair is currently trading at $1.08577, reflecting a modest increase of 0.12%. Analyzing the 4-hour chart, several key levels and technical indicators emerge, providing insight into potential price movements.
The pivot point is identified at $1.0836, serving as a crucial level that could determine the pair's next direction. Immediate resistance is observed at $1.0877, with subsequent resistance levels at $1.0912 and $1.0949. These levels represent potential barriers for any upward movement in the short term.
On the downside, immediate support is found at $1.0806, followed by $1.0777 and $1.0753. These support levels are critical in preventing further declines and could act as bounce points if the pair faces selling pressure.
The Relative Strength Index (RSI) stands at 48, suggesting a neutral market sentiment. An RSI near 50 indicates neither overbought nor oversold conditions, implying potential for movement in either direction based on market catalysts.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0883, slightly above the current price. The proximity of the price to the 50 EMA suggests potential resistance if the pair attempts to climb higher. The 50 EMA is a commonly watched indicator that traders use to gauge medium-term trend direction.
In conclusion, the technical outlook for EUR/USD remains cautiously bullish above the pivot point of $1.0836. Traders are advised to consider buying above $1.08354, with a take profit target of $1.08869 and a stop loss at $1.08120.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.08354
Take Profit – 1.08869
Stop Loss – 1.08120
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$515/ -$234
Profit & Loss Per Mini Lot = +$51/ -$23
EUR/USD Price Analysis – July 26, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair gained positive traction, turning bullish around the 1.0857 level and reaching an intra-day high of 1.0861.
This upward movement is primarily due to the weakening US dollar, which has been under pressure amid expectations for Federal Reserve (Fed) rate cuts later this year. Softer-than-expected US inflation figures have intensified these expectations, potentially leading to lower interest rates and further weakening the dollar.
However, the EUR/USD pair's gains may be limited by ongoing economic challenges in the Eurozone. Germany's PMI data recently showed contraction, and the European Central Bank (ECB) is anticipated to cut rates further, which could also put downward pressure on the Euro.
Additionally, the Euro faces headwinds from a significant tax relief package, impacting its overall value.
Weak German Economy and ECB Rate Cut Expectations Pressure EUR/USD Pair
On the EUR front, the Eurozone is facing a tough time as Germany, its largest economy, struggles with economic contraction. In July, the German Hamburg Commercial Bank (HCOB) Composite Purchasing Managers Index (PMI) fell to 48.7 from 50.4, signaling a decline in private sector activity.
Dr. Cyrus de la Rubia, HCOB’s Chief Economist, warned that Germany’s economy is shrinking, particularly due to a sharp drop in manufacturing output. This weak performance is affecting the Euro, compounded by expectations of two more rate cuts by the European Central Bank (ECB).
ECB officials are considering these cuts to boost the economy, especially as inflation is projected to hit 2% by 2025.
Meanwhile, Germany’s 30 billion euros tax relief plan shows the government’s concern over low demand. The upcoming Eurozone Harmonized Index of Consumer Prices (HICP) data will be crucial in determining the timing of future ECB rate cuts.
Therefore, the weak German economy and anticipated ECB rate cuts are likely to weaken the Euro. As Germany struggles with contraction and inflation expectations shift, the EUR/USD pair could see downward pressure, with the Euro losing ground against the US dollar.
Impact of US Inflation Data and Fed Rate Cut Speculation on EUR/USD Pair
On the US front, the broad-based US dollar has been losing its momentum as investors await the core Personal Consumption Expenditures (PCE) price index data for June, set for release at 12:30 GMT.
Economists forecast that inflation will ease slightly to 2.5% year-over-year in June from 2.6% previously, with a steady 0.1% monthly increase. This data will play a crucial role in shaping market expectations for Federal Reserve (Fed) rate cuts this year.
Currently, there is strong speculation that the Fed will cut rates in September. If inflation figures are softer than expected, it would likely support the case for these cuts, while stubbornly high inflation could weaken this expectation.
The US dollar has shown subdued performance as traders remain cautious, knowing that the Fed is expected to keep its key rates steady at 5.25%-5.50% during its July 31 meeting.
Therefore, the subdued US dollar and anticipated Fed rate cuts could benefit the EUR/USD pair. Softer inflation data might reinforce expectations for September rate cuts, potentially strengthening the Euro against the Dollar.
EUR/USD - Technical Analysis
The EUR/USD currency pair is currently trading at $1.08577, reflecting a modest increase of 0.12%. Analyzing the 4-hour chart, several key levels and technical indicators emerge, providing insight into potential price movements.
The pivot point is identified at $1.0836, serving as a crucial level that could determine the pair's next direction. Immediate resistance is observed at $1.0877, with subsequent resistance levels at $1.0912 and $1.0949. These levels represent potential barriers for any upward movement in the short term.
On the downside, immediate support is found at $1.0806, followed by $1.0777 and $1.0753. These support levels are critical in preventing further declines and could act as bounce points if the pair faces selling pressure.
The Relative Strength Index (RSI) stands at 48, suggesting a neutral market sentiment. An RSI near 50 indicates neither overbought nor oversold conditions, implying potential for movement in either direction based on market catalysts.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0883, slightly above the current price. The proximity of the price to the 50 EMA suggests potential resistance if the pair attempts to climb higher. The 50 EMA is a commonly watched indicator that traders use to gauge medium-term trend direction.
In conclusion, the technical outlook for EUR/USD remains cautiously bullish above the pivot point of $1.0836. Traders are advised to consider buying above $1.08354, with a take profit target of $1.08869 and a stop loss at $1.08120.
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EUR/USD Price Analysis – July 24, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to gain positive traction, remaining under pressure around the 1.0845 level and hitting an intra-day low of 1.0825.
The downward trend can be attributed to the preliminary Eurozone Hamburg Commercial Bank (HCOB) PMI report for July, which showed an unexpected easing in composite numbers. This was driven by a slowdown in both manufacturing and services, putting pressure on the EUR/USD pair.
The weak economic activity in the Eurozone is expected to boost expectations of more rate cuts by the European Central Bank (ECB).
Furthermore, the renewed strength of the US dollar, supported by recent developments in the US presidential elections, was another key factor affecting the EUR/USD pair.
However, growing expectations that the Federal Reserve may begin a rate-cutting cycle in September could limit gains in the US dollar and help the EUR/USD pair mitigate its losses.
Eurozone Economic Weakness and ECB Rate Cut Expectations Pressure EUR/USD Pair
On the EUR front, the ECB is expected to cut interest rates two more times by the end of the year due to weak economic activity in the Eurozone. The preliminary Eurozone Hamburg Commercial Bank (HCOB) Purchasing Managers’ Index (PMI) report for July showed a slowdown in both manufacturing and services.
The HCOB Composite PMI decreased to 50.1, just above the 50 threshold that separates expansion from contraction, falling short of investor expectations of 51.1. Manufacturing contracted to 45.6, while services expanded at a slower pace of 51.9.
This in turn, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that weak demand in Germany's manufacturing sector is dragging down overall private sector output.
In contrast, French service providers increased activity due to preparations for the Olympic Games.
Despite this, input prices in the services sector rose at a faster rate, and selling prices remained steady, offering no relief to ECB policymakers. Traders currently expect the ECB to deliver two more rate cuts this year, aligning with some ECB officials' views.
Therefore, the weak Eurozone economic data and expectations for additional ECB rate cuts pressure the EUR/USD pair. Despite increased activity in French services, the overall slowdown and rising input prices contribute to the euro's struggles against the stronger US dollar.
Strong US Dollar and Anticipated Fed Rate Cuts Impact EUR/USD Pair
On the US front, the broad-based US dollar managed to stop its bearish bias and regained its positive traction, edging higher near a weekly high of around 104.50.
This strength is due to investor interest ahead of the US presidential elections in November, with market experts predicting a win for Donald Trump despite the Democratic nomination of Vice President Kamala Harris. Additionally, the US dollar's performance is influenced by anticipation of significant upcoming economic data releases.
On the data front, investors are closely watching the preliminary US S&P Global PMI data for July, which is expected to show modest expansion in both manufacturing and services.
The main triggers for the US dollar this week will be the preliminary Q2 GDP and the Personal Consumption Expenditures (PCE) Price Index data, scheduled for release on Thursday and Friday, respectively. The US economy is projected to have grown by 1.9% in Q2, up from the previous 1.4%.
Investors are particularly focused on the core PCE inflation data, the Federal Reserve’s preferred measure of inflation, to assess the timeline for potential interest rate cuts. Markets currently anticipate these rate cuts to begin in September.
Therefore, the strong US dollar, driven by investor interest ahead of the presidential elections and anticipation of significant economic data releases, pressures the EUR/USD pair. However, potential Federal Reserve rate cuts in September may limit the pair's losses.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.0828, reflecting the latest market movements. The 4-hour chart highlights crucial technical levels that traders should monitor closely. The pivot point is positioned at $1.0847, serving as a central level around which price action is likely to oscillate.
Immediate resistance levels are identified at $1.0878, $1.0912, and $1.0949. These levels represent potential selling points where the market may encounter resistance if it attempts to rise.
On the downside, immediate support levels are found at $1.0806, $1.0777, and $1.0753. These levels are critical as they indicate potential areas where buying interest may emerge, preventing further declines.
The Relative Strength Index (RSI) is currently at 25, suggesting that the market is in oversold territory. This indicates a potential for a rebound if buyers step in at lower levels.
The 50-day Exponential Moving Average (EMA) stands at $1.0894, acting as a dynamic resistance level that traders should watch for potential price reactions.
Given the current technical setup, the recommendation is to sell below $1.08474. The take profit level is set at $1.08068, providing a reasonable downside target. A stop loss is advised at $1.08724 to manage risk, protecting against potential upward reversals.
In conclusion, the technical outlook for EUR/USD suggests a bearish sentiment below the pivot point of $1.0847.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trading at $1.0828; pivot point at $1.0847.
- Immediate resistance levels: $1.0878, $1.0912, $1.0949; support levels: $1.0806, $1.0777, $1.0753.
- RSI at 25, 50-day EMA at $1.0894; sell below $1.08474 with a stop loss at $1.08724.
EUR/USD is currently trading at $1.0828, reflecting the latest market movements. The 4-hour chart highlights crucial technical levels that traders should monitor closely. The pivot point is positioned at $1.0847, serving as a central level around which price action is likely to oscillate.
Immediate resistance levels are identified at $1.0878, $1.0912, and $1.0949. These levels represent potential selling points where the market may encounter resistance if it attempts to rise.
On the downside, immediate support levels are found at $1.0806, $1.0777, and $1.0753. These levels are critical as they indicate potential areas where buying interest may emerge, preventing further declines.
The Relative Strength Index (RSI) is currently at 25, suggesting that the market is in oversold territory.
This indicates a potential for a rebound if buyers step in at lower levels. The 50-day Exponential Moving Average (EMA) stands at $1.0894, acting as a dynamic resistance level that traders should watch for potential price reactions.
Given the current technical setup, the recommendation is to sell below $1.08474. The take profit level is set at $1.08068, providing a reasonable downside target. A stop loss is advised at $1.08724 to manage risk, protecting against potential upward reversals.
In conclusion, the technical outlook for EUR/USD suggests a bearish sentiment below the pivot point of $1.0847.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08474
Take Profit – 1.08068
Stop Loss – 1.08724
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$406/ -$250
Profit & Loss Per Mini Lot = +$40/ -$25
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is trading at $1.08846, with immediate support at $1.0861 and resistance at $1.0904.
- RSI at 44 indicates a neutral stance, allowing for potential moves in either direction.
- Recommended trade setup: Sell below $1.08953, take profit at $1.08603, stop loss at $1.0920.
EUR/USD is currently trading at $1.08846, reflecting a modest gain of 0.09%. On the 4-hour chart, the pivot point is situated at $1.0876, which acts as a crucial marker for market sentiment.
Immediate resistance is identified at $1.0904, with subsequent resistance levels at $1.0924 and $1.0948. On the downside, immediate support lies at $1.0861, followed by stronger support at $1.0844 and $1.0825.
Technical indicators provide a nuanced picture. The Relative Strength Index (RSI) is currently at 44, suggesting that the currency pair is in neutral territory. This indicates that there is no immediate overbought or oversold condition, leaving room for further price movements in either direction.
The 50-day Exponential Moving Average (EMA) stands at $1.0888, slightly above the current price, hinting at a potential bearish trend if the price remains below this level.
Given the technical setup, a cautious approach is advised. A sell entry is recommended below the pivot point at $1.08953. The suggested take profit level is $1.08603, aligning with the immediate support level. To mitigate risk, a stop loss should be placed at $1.0920, just above the next resistance level, to guard against unexpected upward movements.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08953
Take Profit – 1.08603
Stop Loss – 1.0920
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$350/ -$250
Profit & Loss Per Mini Lot = +$35/ -$25
EUR/USD Price Analysis – July 22, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward trend, trading robustly around 1.0891 and reaching an intra-day peak of 1.0903.
This rally was bolstered by a weakening US dollar, which lost momentum due to recent US political developments and heightened expectations of a Federal Reserve rate cut cycle potentially beginning in September.
Additionally, the European Central Bank's decision to keep interest rates unchanged and refrain from signaling any imminent rate cuts at its upcoming meeting further supported the euro, contributing to the gains in the EUR/USD pair.
Moving ahead, investors are keeping an eye on German Retail Sales and the US Chicago Fed National Activity Index, both due later today. Meanwhile, they are watching for signals about the Federal Reserve's future actions, which will impact dollar prices.
Political Shifts and Fed Rate Cut Expectations Weaken the US Dollar, Supporting EUR/USD
On the US front, the broad-based US dollar starts the new week on a bearish note due to recent political developments. US President Joe Biden’s surprising decision to step down from the 2024 Presidential election raises the probability of Donald Trump becoming the next president.
This political shift, combined with expectations that the Federal Reserve might cut interest rates in September, has made investors more willing to take risks.
As a result, the US dollar, usually seen as a safe-haven asset, loses strength and supports the EUR/USD pair. Additionally, rising bets on a Federal Reserve rate cut in September and the weak US labor market exert selling pressure on the dollar.
However, the CME FedWatch Tool shows less than a 5% probability of a move at the July meeting, but a nearly full rate cut is expected in September. New York Fed President John Williams indicated a rate cut could be warranted in the coming months, but not in July.
ECB’s Steady Rate Policy and Cautious Outlook Boost EUR/USD
On the other hand, the upticks in the EUR/USD pair are further bolstered by the ECB left interest rates unchanged last week and gave no hints about rate cuts at its next meeting.
ECB President Christine Lagarde indicated that although inflation in the Eurozone is getting better, high rates need to be maintained for now. The likelihood of a rate cut in September has decreased from 73% to 65%.
This cautious approach by the ECB is expected to support the euro against the US dollar. In short, the euro benefits from the ECB’s decision to hold rates steady and its careful, data-based strategy.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.08846, reflecting a modest gain of 0.09%. On the 4-hour chart, the pivot point is situated at $1.0876, which acts as a crucial marker for market sentiment.
Immediate resistance is identified at $1.0904, with subsequent resistance levels at $1.0924 and $1.0948. On the downside, immediate support lies at $1.0861, followed by stronger support at $1.0844 and $1.0825.
Technical indicators provide a nuanced picture. The Relative Strength Index (RSI) is currently at 44, suggesting that the currency pair is in neutral territory. This indicates that there is no immediate overbought or oversold condition, leaving room for further price movements in either direction.
The 50-day Exponential Moving Average (EMA) stands at $1.0888, slightly above the current price, hinting at a potential bearish trend if the price remains below this level.
Given the technical setup, a cautious approach is advised. A sell entry is recommended below the pivot point at $1.08953.
The suggested take profit level is $1.08603, aligning with the immediate support level. To mitigate risk, a stop loss should be placed at $1.0920, just above the next resistance level, to guard against unexpected upward movements.
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EUR/USD Price Analysis – July 19, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair continued its downward trend, settling around 1.0884 and hitting an intraday low of 1.0876.
This decline was driven by a strengthening US dollar, bolstered by growing speculation that the Republican Party might win the upcoming US Presidential elections.
Additionally, the EUR/USD pair's losses were exacerbated by comments from ECB official Villeroy, who suggested that two more rate cuts this year might be appropriate. This outlook weighed on the euro, further contributing to the pair's decline.
US Dollar Strengthens Amid Fed Rate Cut Speculation and Rising Unemployment, Potentially Impacting EUR/USD
On the US front, the broad-based US dollar is gaining strength even though investors anticipate that the Federal Reserve (Fed) might start cutting interest rates in September, as they believe inflation is moving closer to the 2% target.
Policymakers, however, are seeking more conclusive data before making a decision. The speculation around Fed rate cuts increased following June’s Consumer Price Index (CPI) report, which revealed a return to disinflation.
Both annual headline and core CPI slowed more than expected, with monthly headline inflation declining for the first time in over four years. Additionally, easing conditions in the US labor market have further bolstered expectations for rate cuts.
On the data front, the Unemployment Rate increased to 4.1% in June, the highest level since November 2021. Initial Jobless Claims for the week ending July 12 reached 243,000, surpassing both the expected 230,000 and the previous week’s 223,000. This rise in claims suggests more people are seeking unemployment benefits than anticipated.
Therefore, the bullish US dollar amid rising unemployment and expectations of Fed rate cuts could weigh on the EUR/USD pair, potentially causing the euro to depreciate against the dollar.
ECB's Uncertain Rate Cut Outlook and Lower Growth Projections May Weaken Euro
On the EUR front, the ECB kept interest rates unchanged on Thursday, with President Christine Lagarde avoiding any firm commitment to future rate cuts.
However, ECB policymaker Francois Villeroy de Galhau indicated that markets expect two more rate cuts this year, with possible policy tightening starting in September and continuing in December.
The ECB’s Survey of Professional Forecasters revealed that price pressures are expected to remain around 2.4%, returning to 2.0% by 2025. The growth target for 2025 was revised down to 0.7% from the previous estimate of 0.5%.
Therefore, the ECB's uncertain stance on rate cuts and lower growth projections may weaken the euro, potentially leading to a decline in the EUR/USD pair as market expectations shift.
EUR/USD - Technical Analysis
The EUR/USD is currently trading at $1.08864, reflecting a modest decline of 0.07%. The 4-hour chart indicates critical levels that traders should monitor closely. The pivot point is set at $1.0920, serving as a key indicator for potential price movements.
Immediate resistance is identified at $1.0909, with subsequent resistance levels at $1.0928 and $1.0948. On the downside, immediate support is at $1.0861, followed by $1.0844 and $1.0825.
Technical indicators suggest a cautious sentiment in the market. The Relative Strength Index (RSI) stands at 42, indicating a slight bearish tilt but not yet in oversold territory. The 50-day Exponential Moving Average (EMA) is positioned at $1.0880, just below the current price, acting as a potential support level.
Given the technical setup, traders might consider placing a buy order above the 50-day EMA at $1.08805 to capitalize on potential upward momentum.
The suggested trade setup includes an entry price above $1.08805, a take profit target at $1.09199, and a stop loss at $1.08598. This strategy aims to leverage a rebound while maintaining a controlled risk profile.
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