EUR/USD Current Price: 1.1163
US Consumer Confidence Plummets, Fed Rate Cut Speculation Rises
- US Consumer Confidence unexpectedly dropped in September.
- Speculative interest increases bets of another 50 bps rate cut from the Fed.
- EUR/USD trims losses and aims for further gains.
The EUR/USD pair managed to recover from Monday’s losses and closed Tuesday around 1.1160, as the US Dollar weakened broadly. Despite initial lackluster performance in the Euro due to disappointing European data, it regained strength later in the day.
Market Impact: Euro vs. US Dollar
The German IFO Business Climate survey saw an unexpected decline in September, with the US CB Consumer Confidence also dropping significantly. This data led to speculation that the Fed might implement a 50 bps rate cut in November, boosting stock markets but pressuring the USD.
Wednesday’s economic calendar will be light, with the EU withholding significant releases and the US only publishing weekly MBA Mortgage Applications and August New Home Sales figures.
EUR/USD Short-Term Technical Analysis
Despite limited upward momentum, the EUR/USD pair aims to continue its advance. In the daily chart, it remains above the 20 SMA at around 1.1090, with technical indicators showing a bullish trend. The 100 SMA is above the 200 SMA, indicating a mildly bullish sentiment. In the 4-hour chart, the pair has recovered above all moving averages, with RSI and Momentum indicators supporting further bullish movement.
Support levels: 1.1120, 1.1090, 1.1050
Resistance levels: 1.1200, 1.1250, 1.1290
Analysis and Conclusion
The EUR/USD pair’s performance is influenced by a mix of economic data, market sentiment, and technical factors. The recent decline in US Consumer Confidence and speculation of a Fed rate cut have impacted the pair’s movement. For investors and traders, staying informed about these factors is crucial for making informed decisions.
Understanding the interplay between economic indicators, central bank policies, and technical analysis can help individuals navigate the complex world of forex trading. Whether you are a seasoned investor or a beginner, keeping track of market developments and trends is essential for financial success.