EUR/USD struggled on Wednesday, hovering just above the 1.0900 handle as traders paused following a turbulent rebalancing late last week. Despite attempts to break higher in recent days, Fiber bids lost momentum, failing to reach the coveted 1.1000 mark.
Forex Today: Focus Shifts to US Labor Data
The upcoming trading week lacks significant economic calendar releases, with Federal Reserve (Fed) rate cut expectations driving market sentiment. Traders await next week’s key data releases, including US Producer Price Index (PPI) inflation, European Gross Domestic Product (GDP) growth, and US Consumer Price Index (CPI) inflation.
Market projections suggest a high likelihood of a 50-basis-point rate cut by the Fed on September 18, with additional cuts anticipated through 2024. The CME’s FedWatch Tool predicts an 83% chance of the fed funds rate reaching 425-450 basis points by year-end.
EUR/USD Technical Outlook
The EUR/USD pair retreated from 1.1000 after failing to sustain upward momentum. Price action is anticipated to revert to a descending channel on daily candlesticks. The pair has remained range-bound around the 200-day Exponential Moving Average (EMA) in 2024, with short-term momentum turning bearish once more. Sellers are eyeing the 1.0800 level, aiming to breach it and test the next major support below 1.0700.
EUR/USD Daily Chart
Euro FAQs
The Euro serves as the currency for 20 European Union countries in the Eurozone, ranking as the second most traded currency globally after the US Dollar. With a daily turnover exceeding $2.2 trillion, the Euro accounts for 31% of all foreign exchange transactions. EUR/USD stands out as the most traded currency pair worldwide, comprising approximately 30% of total transactions.
The European Central Bank (ECB) in Frankfurt, Germany, acts as the Eurozone’s reserve bank, setting interest rates and managing monetary policy. The ECB’s primary objective is to maintain price stability by controlling inflation or stimulating growth through interest rate adjustments. Key economic indicators, such as GDP, manufacturing data, and inflation figures, influence the Euro’s performance in the global market.
In summary, the EUR/USD pair faced challenges amid market volatility and Fed rate cut expectations, with traders awaiting key economic data for further direction. The Euro’s performance hinges on various factors, including ECB policies, economic indicators, and global market dynamics, impacting investors and consumers worldwide.