EUR/USD Analysis: ECB Leaves Rates Unchanged, US Unemployment Worse Than Expected
The European Central Bank (ECB) decided to keep interest rates unchanged, as expected, while the United States (US) reported worse than expected unemployment figures. Despite these events, the EUR/USD pair maintained its higher ground but lacked directional strength.
Throughout the day, the EUR/USD pair traded around 1.0930, showing stability but little movement leading up to the ECB’s decision. The central bank’s statement indicated a data-dependent approach to rate decisions, with hints of a potential rate cut in September. Market participants are still anticipating a rate cut from both the ECB and the Federal Reserve later in the year.
In the US, Initial Jobless Claims for the week ended July 12 unexpectedly rose to 243K, while the July Philadelphia Fed Manufacturing Survey showed significant improvement. These mixed economic indicators contributed to the pair’s static movement.
EUR/USD Technical Outlook
On the daily chart, the EUR/USD pair is consolidating near its recent high, with technical indicators showing a neutral to mildly bearish stance. Despite being in overbought territory, the pair remains above all its moving averages, indicating continued bullish dominance.
In the short term, the pair is neutral with a slight upward bias. The 20 SMA on the 4-hour chart is providing support around 1.0910, while technical indicators suggest a lack of selling interest despite losing directional strength.
Support levels: 1.0910, 1.0865, 1.0820
Resistance levels: 1.0945, 1.0990, 1.1020
Analysis: The ECB’s decision to keep rates unchanged and the unexpected rise in US unemployment figures have influenced the EUR/USD pair’s movement. Market participants are now looking towards future rate cuts from both central banks. The technical outlook shows a neutral stance in the short term, with potential for further upside movement. Traders should monitor upcoming economic data and central bank statements for potential market shifts.