EUR/USD Price Update: Dollar Weakens Ahead of Fed Announcement
- US Dollar weakens as market anticipates Fed rate cut
- ADP report shows US private sector adds 122K jobs in July
- EUR/USD moves higher, but buyers cautious
The EUR/USD pair is trading higher in the European session as the US Dollar weakens against major rivals ahead of the Federal Reserve’s monetary policy announcement. Market participants are expecting the Fed to keep rates on hold but are hopeful for a September rate cut. Speculative interest also suggests a possible rate cut in December.
During Asian trading hours, the Bank of Japan raised interest rates by 15 basis points, causing the Japanese Yen to strengthen and the USD to weaken. In the Eurozone, the July HICP rose by 2.6% YoY, surpassing expectations, with no negative impact on the Euro as a rate cut from the ECB is already priced in.
The US ADP Employment Change report showed the private sector added 122K jobs in July, missing expectations.
EUR/USD Technical Outlook
On the daily chart, the EUR/USD pair is facing resistance at the 20 SMA around 1.0860. The 100 and 200 SMAs are directionless below the current level, indicating bearish momentum. The Momentum indicator shows a modest bearish slope, and the RSI is around 50 with no clear direction.
In the near term, technical indicators on the 4-hour chart suggest limited upside potential. The 200 SMA at 1.0800 is acting as resistance, with the pair struggling to surpass the 20 SMA for a potential upward move.
Support: 1.0800, 1.0760, 1.0720
Resistance: 1.0860, 1.0910, 1.0950
Analysis:
The EUR/USD pair is currently influenced by the weakening US Dollar and market expectations of a Fed rate cut. Traders should pay attention to the upcoming Fed announcement and potential rate cuts in September and December. Technical indicators suggest limited upside potential in the near term, with resistance levels at 1.0860, 1.0910, and 1.0950. Support levels are at 1.0800, 1.0760, and 1.0720. Stay informed and monitor market developments to make informed investment decisions.