EUR/USD Forecast: Fed Uncertainty Weighs on Market Sentiment, JOLTS Job Openings in Focus
- Market sentiment remains negative as uncertainty looms over Fed’s next move.
- US set to release JOLTS Job Openings, impacting Fed rate cut speculation.
- EUR/USD steady at 1.1050, downside risk prevails in the short term.
The EUR/USD pair is trading around 1.1050 with a lack of significant movement as pessimism continues to dominate the market. Both Asian and European markets are slightly down following Wall Street’s decline, with US futures struggling near recent lows. Despite risk aversion, the US Dollar is not gaining strength as speculation grows that the Federal Reserve might slash interest rates by 50 basis points at its upcoming meeting.
Before the Fed’s decision, the US will release key employment data that could influence the central bank’s rate cut decision. The first important report, JOLTS Job Openings for July, will be released shortly after the US market opens. Additionally, the ADP Employment Change report is scheduled for Thursday, followed by the highly anticipated Nonfarm Payrolls (NFP) report on Friday.
On the other hand, the Eurozone’s final Services and Composite Purchasing Managers Indexes (PMIs) were released by the Hamburg Commercial Bank (HCOB). Services output was revised lower to 52.9, while the Composite PMI was confirmed at 51, slightly below the initial estimate. The EU also published the July Producer Price Index (PPI), showing a 2.1% decline year-over-year but a 0.8% increase month-over-month.
EUR/USD Technical Analysis: Bearish Momentum Eases, Support at 1.1000
Technically, the EUR/USD pair faces downside pressure but with a slight easing of bearish momentum. On the daily chart, the pair is below the 20 Simple Moving Average (SMA) at 1.1065, acting as dynamic resistance. Technical indicators have stabilized near their midlines, indicating potential buying interest near the 1.1000 support level.
In the 4-hour chart, the 20 SMA is below the 100 SMA but has flattened out, providing resistance around 1.1060. The Momentum indicator is neutral, and the RSI is slightly bearish, suggesting a downside bias.
Support: 1.1020, 1.0975, 1.0940
Resistance: 1.1065, 1.1100, 1.1145
Analysis:
The EUR/USD pair is facing downward pressure amid uncertainty over the Fed’s rate cut decision. Key US employment data releases could sway market sentiment and influence the Fed’s move. Meanwhile, technical indicators point to a potential downside movement, with support near 1.1000. Traders should closely monitor upcoming economic data and technical levels for trading opportunities in the EUR/USD pair.