In today’s early European session, the EUR/USD pair is showing slight gains around 1.1055, breaking a three-day losing streak. The dovish stance of the US Federal Reserve (Fed) is weighing on the Greenback, providing support to EUR/USD.
Market sentiment is currently pricing in a 70% chance of a 25 basis points rate cut by the Fed in September, with a 30% possibility of a 50 bps reduction, according to the CME FedWatch tool. Investors will closely monitor the US employment data on Friday for more clarity on potential rate cuts next month.
From a technical standpoint, EUR/USD maintains a bullish outlook as it remains above the key 100-day Exponential Moving Averages (EMA) on the daily chart. However, the 14-day Relative Strength Index (RSI) indicates neutral momentum, suggesting possible consolidation in the near term.
The immediate resistance level for EUR/USD is at 1.1185, followed by 1.1230 and 1.1275. On the downside, the pair has support at the psychological level of 1.1000, with further support at 1.0950 and 1.0893.
Euro FAQs
The Euro is the currency for the 20 European Union countries in the Eurozone, with EUR/USD being the most traded currency pair globally. The European Central Bank (ECB) in Frankfurt sets interest rates and manages monetary policy, aiming to maintain price stability. Inflation data, economic indicators, and trade balance reports can all influence the strength of the Euro.
Overall, the current market conditions favor EUR/USD as the Fed’s dovish stance and rate cut expectations weigh on the US Dollar. Traders should keep an eye on upcoming economic data releases and Fed announcements for potential impact on the currency pair’s movement.