EUR/USD Forecast: Powell’s Comments Drive Pair Higher, But Caution Looms
- German IFO Survey Beats Expectations, Euro Fails to Gain Ground
- US Durable Goods Orders Surge in July, Dollar Remains Steady
- EUR/USD Correction Possible, Bulls Still in Control
The EUR/USD pair is retracing from recent highs near 1.1200 despite a positive risk sentiment. Following Federal Reserve Chairman Jerome Powell’s comments at the Jackson Hole Symposium, the pair surged on Friday. Powell hinted at a potential interest rate cut in September, citing the need for policy adjustments. However, caution prevails as market players await the US Personal Consumption Expenditures (PCE) Price Index later this week, which could influence the depth of the rate cut.
Meanwhile, Germany’s IFO Business Climate index for August came in at 86.6, slightly better than expected, while US Durable Goods Orders for July soared by 9.9%, surpassing forecasts. Despite the positive data, uncertainty lingers regarding the extent of the upcoming rate cut in the US.
EUR/USD Technical Analysis
The EUR/USD pair is currently trading at 1.1160, with bullish momentum still intact. The daily chart shows the pair well above key moving averages, indicating continued strength. In the short term, a bullish 20 SMA at 1.1145 offers support, while resistance levels are seen at 1.1210, 1.1250, and 1.1290.
Overall, while a correction may be on the horizon, bulls remain in control of the EUR/USD pair. Traders should monitor upcoming economic data releases for further clues on the future direction of the pair.