EUR/USD Surges to Highest Level Since January: Optimism Prevails Amidst Potential Fed Rate Cut
The EUR/USD pair is currently trading at 1.1038, hitting its highest level since January as market optimism continues to grow. Investors are increasingly confident in an upcoming rate cut from the Federal Reserve, driving the pair’s upward momentum.
Throughout the day, the US Dollar faced pressure as optimism prevailed, pushing the EUR/USD pair above the 1.1000 threshold to reach a high of 1.1034 during the European session. Speculation surrounding the US Consumer Price Index (CPI) supporting a potential rate cut at the Fed’s September meeting boosted market sentiment, especially after softer-than-expected US Producer Price Index (PPI) data was released earlier in the week.
Although the US inflation data showed a slight easing, with the CPI rising by 2.9% year-on-year in July, the Fed’s potential interest rate cut remains on the table. The initial impact on the USD was negative, but the market quickly adjusted its expectations, leading to a partial recovery for the greenback.
EUR/USD Technical Analysis: Bulls in Control
The daily chart for the EUR/USD pair indicates a strong bullish trend, with the pair surpassing key resistance levels and maintaining its positive momentum. Technical indicators suggest further upside potential, with resistance levels at 1.1045, 1.1085, and 1.1120. On the downside, support levels are at 1.0990, 1.0950, and 1.0900.
Short-term technical outlook shows continued buying interest, with the 4-hour chart signaling overbought conditions but maintaining upward momentum. The current resistance level at 1.1040 could be broken, paving the way for a potential rally towards 1.1085.