- EUR/USD moves lower and tests the 1.1070 region.
- Advanced PMIs for the current month are due later in the region.
- The Jackson Hole Symposium starts today. Powell speaks tomorrow.
The bearish mood around the shared currency is everything but abated in the second half of the week, with EUR/USD now probing the area of session lows near 1.1070.
EUR/USD focused on data, weaker post-FOMC
The pair is trading within the negative territory for the second session in a row today following the persistent and gradual up move in the buck.
In fact, yesterday’s FOMC minutes of the August event lent extra legs to the Greenback after the Committee unveiled a strong bias among members to keep rates unchanged or adjust them by a small hike (which was what eventually happened). In addition, members continue to see a healthy economy and a robust labour market despite rising uncertainty on the outlook.
Closer to home, Italian politics should continue to limit occasional and serious bullish attempts in combination with increasing expectations of extra ECB easing at next month’s gathering.
Later in the European morning, Markit will publish its advanced PMIs in core Euroland for the month of August. Across the pond, the usual weekly report on the labour market is due along with flash PMIs and the start of the Jackson Hole Symposium.
What to look for around EUR
EUR has finally succumbed to the downside pressure although another test of YTD lows in the proximity of 1.1020 remains elusive for the time being. Renewed buying interest surrounding the buck, expectations of ECB easing and Italian politics are seen driving the mood around the shared currency at the moment. That said, sustained bullish attempts in the pair still look flimsy amidst ECB’s preparations for a fresh wave of monetary stimulus (most likely to be announced in September), including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system. This scenario has been confirmed as of late following poor results from the euro-docket, adding to the unremitting deterioration of the economic outlook in the region.
EUR/USD levels to watch
At the moment, the pair is losing 0.05% at 1.1078 and faces immediate contention at 1.1065 (low Aug.20) seconded by 1.1026 (2019 low Aug.1) and finally 1.0839 (monthly low May 11 2017). On the other hand, a breakout of 1.1136 (21-day SMA) would target 1.1218 (55-day SMA) en route to 1.1282 (high Jul.19).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD stays weak near 1.2400 after UK Retail Sales data
GBP/USD stays vulnerable near 1.2400 early Friday, sitting at five-month troughs. The UK Retail Sales data came in mixed and added to the weakness in the pair. Risk-aversion on the Middle East escalation keeps the pair on the back foot.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Israel vs. Iran: Fear of escalation grips risk markets
Recent reports of an Israeli aerial bombardment targeting a key nuclear facility in central Isfahan have sparked a significant shift out of risk assets and into safe-haven investments.