EUR/USD Remains Steady Below 1.1100, Awaiting US Data for Next Move
Hey legends, today we're going to share some trading insights of EUR/USD, if you're enthusiastic Forex trader, this bite would much more suitable for your next trading decision. Alright lets dive into it!
Here is some wrap up first:
The EUR/USD pair is treading water just below the 1.1100 level during European trading hours on Friday. The pair is consolidating gains from its recent rebound, driven by persistent weakness in the US Dollar and a mixed market sentiment. Traders are carefully evaluating the European Central Bank's (ECB) recent policy decision, while awaiting the upcoming US economic data for fresh cues.
Technical Analysis of EUR/USD
From the technical point, i i know this is probably you favourite
the EUR/USD is gaining traction. The Relative Strength Index (RSI) on the 4-hour chart has moved above 60, signaling the rise in bullish momentum. Moreover, the pair has climbed marginally above the 100-period Simple Moving Average (SMA). Should EUR/USD break past the 1.1090–1.1100 resistance zone (which includes the 100-period SMA and the 23.6% Fibonacci retracement of the latest uptrend), it may then aim for the next key resistance levels at 1.1160 (a static level) and 1.1200 (the end-point of the recent uptrend).
On the flip side, initial support lies at 1.1060 (50-period SMA), followed by 1.1040 (the 38.2% Fibonacci retracement) and 1.1020 (200-period SMA).
Fundamental Analysis
and we also need some fundamental facts to support our trading decision as well! Here are some points
After a slow start to the week with three consecutive down days, EUR/USD turned bullish on Thursday, recording solid gains. The pair remains in an upward trajectory in Friday's European morning session, gradually advancing towards the 1.1100 threshold.
In line with expectations, the ECB reduced the deposit facility rate by 25 basis points (bps) to 3.5%, along with cuts to the marginal lending facility and main refinancing rate by 60 bps. The ECB, in its official statement, reiterated its data-driven and meeting-by-meeting strategy to determine the necessary level of policy tightening. ECB President Christine Lagarde, however, avoided providing any hints about the timeline for future rate cuts during her press conference.
Although the ECB meeting didn’t offer significant support to the Euro, the broad weakness of the US Dollar provided enough tailwind for EUR/USD to continue its ascent.
In the US, the Producer Price Index (PPI) for August increased by 1.7% year-over-year, down from July's 2.1% and missing expectations of 1.8%. This data raised the probability of a 50 bps rate cut by the Federal Reserve in September to over 40%, according to the CME FedWatch Tool, which in turn sparked a selloff in the USD.
As traders look ahead, the upcoming University of Michigan's Consumer Sentiment Survey for September will be the key data release to watch, though it's unlikely to cause any significant shifts in the USD's value.