Euro looks to be on the table, with a rally to 1.0800 as well as higher. Following last week’s testing, the eyes were given some time to heal.
Euro Key Points
The Euro regains 1.0800 versus a weakened US dollar.
European stocks are off to a good beginning this week.
The USD Indicator (DXY) is trading at 104.00 level
US rates are trading at a little loss versus a tiny increase for German bunds.
The single statistic on the USA’s docket is the Dallas Fed Manufacturing Index.
Euro vs USD is hovering near the 1.0800 region.
Following a difficult last week, the Euro looks to be looking for a little respite and rebound on Monday. EURUSD lost for the sixth week in a row. Whereas EURGBP completed the week fairly well after a first week sell-off reaching new rear to present lows as well.
Meanwhile, markets appear to have fully absorbed Chair Jerome Powell’s remarks during the Jackson Hole Summit on Friday. Where he kept many of policy options open and repeated that additional rate rises are not a certainty.
In terms of monetary affairs, there is renewed debate over the Fed’s resolve to maintain a tougher posture for a protracted period. This increasing attention stems on the US economy’s exceptional durability. Notwithstanding recently small weakening in job markets and lower inflation numbers.
Concurrently, disputes amongst the (ECB) board members have risen on the likely delay in strict rules past the summer time. These disputes are producing a new feeling of fragility, that is harming the Euro.
There isn’t much on the cards for the Eurozone, the United States, or the UK during this week in terms of risk events. But all of them might have an impact on EURUSD. This week, the Eurozone will publish its new inflation flash estimations. That might serve as a major signal for the ECB’s stance at its Sept session. Anything that suggests that inflation is beginning to rise further. Or the currently steady drop has started to lose momentum, might confirm the ECB’s resolve to boost rates shortly thereafter.
Technical Perspective
The downward threat facing the EURUSD looks like it has lessened slightly towards the start of the fresh trading week. Giving the price at the moment a bit of cushion near the 1.0800 level.
Continued declines might push the EURUSD duo value down to Friday’s bottom of 1.0765 mark. Beyond of the lows of May 31 around 1.0635 with March 15 to 1.0516 levels. If this mark is breached, a re-test of the 2023 bottom at 1.0481, observed on the 6th of January, might occur.
In the meanwhile, sporadic spurts of vigor will face interim resistance at the 55-day SMA near 1.0965 level. Before hitting the psychological 1.1000 threshold with the August 10 peak at 1.1064 mark. When that obstacle is overcome, spot might target its July 27 high of 1.1149 level. Should the pair’s price move above this level, it might relieve part of the adverse momentum. And possibly reach the 2023 top of 1.1275, which was reached dated July 18, 2023.
