The EUR/USD pair is experiencing a decline of over 0.30% as the US Dollar gains strength from high Treasury yields, even though the Fed hints at potential rate cuts in September. Currently, the pair is hovering around the 1.1100 mark for the third consecutive day.
Key Points:
- US data shows mixed results with rising jobless claims and service growth but worsening manufacturing contraction.
- ECB’s Kazaks hints at possible rate cuts with a cautious policy approach.
Wall Street closed with losses ahead of Fed Chair Jerome Powell’s upcoming speech at Jackson Hole. Boston and Philadelphia Fed Presidents support easing policy, emphasizing the importance of gradual rate cuts. US Initial Jobless Claims exceeded expectations, while the S&P Global PMIs indicate mixed performance in business activity.
In the Eurozone, Flash PMIs were also mixed, but ECB’s Kazaks expressed openness to discussing rate cuts in September while maintaining a restrictive policy stance. This news has impacted the EUR/USD pair’s movement.
Technical Outlook and Forecast:
Technically, the EUR/USD pair shows a bearish harami pattern, but sellers have not been able to push the exchange rate below 1.1100. Momentum remains bullish, but a drop below 1.1100 could lead to further downside.
If the pair stays above 1.1100, it may re-test the year-to-date high of 1.1174. However, a break below 1.1100 could see support levels at 1.1047 and 1.1000.
Euro FAQs:
For those interested in the Euro currency, here are some FAQs:
- The Euro is the currency for 20 European Union countries in the Eurozone, with EUR/USD being the most traded currency pair globally.
- The European Central Bank (ECB) in Frankfurt manages monetary policy for the Eurozone by setting interest rates.
- Eurozone inflation data, economic indicators, and trade balance all play a significant role in the Euro’s value.
Overall, the current market conditions suggest a bearish outlook for the EUR/USD pair due to the USD’s strength from robust Treasury yields. Investors should monitor upcoming data releases and central bank speeches for further insights into market movements.