Fundamental
Overview
The USD continues to remain
under pressure amid positive risk sentiment and the imminent rate cuts from the
Fed which should help global growth. These are generally bearish drivers for
the greenback.
In fact, the appreciation
of the EUR has been mostly driven by the US Dollar side of the equation. The ECB
is expected to cut in September as well and then deliver at least another cut
by the end of the year.
The focus will be on
tomorrow’s Flash PMIs and then Fed Chair Powell speech at the Jackson Hole
Symposium on Friday.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that EURUSD extended the rally all the way to the 1.1136 level. This is where
we can expect the sellers to step in with a defined risk above the level to
position for a drop back into the 1.10 handle. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into the
1.1278 level next.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see that we have a good support
zone around the 1.1050 level where we can find the confluence
of the previous swing high level, the trendline and the 50% Fibonacci
retracement level.
If we get a pullback from
these levels, we can expect the buyers to lean on the trendline to position for
a break above the 1.1136 level with a better risk to reward setup. The sellers,
on the other hand, will want to see the price breaking lower to increase the
bearish bets into new lows.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, we can
see that we have another minor upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to position for new
highs, while the sellers will want to see a break below it to increase the
bearish bets into the 1.1050 support. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we get the Eurozone PMIs, the US Jobless Claims and US PMIs. On Friday
we conclude the week with Fed Chair Powell speaking at the Jackson Hole
Symposium.