Euro was unable to continue a run to new highs against the US Dollar.
The Euro (EUR) is losing ground against the US Dollar (USD). Forcing the EURUSD to fall back into negative territory after reaching as high as 1.0770 earlier on Tuesday.
Meanwhile, the US dollar regains some purchasing interest. Following Monday’s significant retreat . Raises the USD Index (DXY) back to 104.70.
In terms of monetary policy, market players continue to factor in the possibility of a Federal Reserve (Fed) interest rate rise in November. While market participants continue to factor in the possibility of rate reduction occurring in the second quarter of 2024.
Turning to the European Central Bank (ECB). Market speculation appears to indicate to a pause at the September 14 meeting. And a quarter-point rate hike by year’s end, given the current status of a somewhat divided Council.
Returning to the euro calendar, the ZEW Institute’s Economic Sentiment Index for the current month will be released later in the European morning. WhileThe NFIB Business Optimism Index and the API’s normal weekly report on US crude oil supply are coming later in the NA trading hours.
Daily market movers: The euro is still trading below the 200-day simple moving average.
The EUR loses up some of Monday’s gains against the USD.
In the United States, there is a lack of direction, whereas Germany has yielded thus far.
The ECB is expected to maintain the deposit rate unchanged this week, according to market expectations.
In July, the UK unemployment rate increased to 4.3%.
Investors are still pricing in Fed rate cuts in Q2 2024.
In August, the Core CPI in Spain increased 6.1% year on year.
Technical Analysis
The euro is under pressure and faces more declines.
EURUSD starts its downward trend and returns toSo far on Tuesday, the 1.0700 region and maybe lower.
If the EURUSD manages to break below the September low of 1.0685 (September 7), it may retest the May low of 1.0635 (May 31) before potentially hitting the March low of 1.0516 (March 15). If the latter level is violated, a probable analysis of the 2023 low at 1.0481 (January 6) will be initiated.
On the other hand, in terms of upward momentum, the present focus is on the important 200-day SMA at 1.0824. Beyond there, bullish momentum might lead to a test of the weekly peak at 1.0945 (August 30), which is also supported by the provisional 55-day SMA at 1.0937. As a result, this situation might open the way for progress toward1.1000 psychological level and the August high of 1.1064 (August 10). If spot clears this region, it may relieve some of the bearish pressure and aim for the weekly peak at 1.1149 (July 27), followed by the 2023 top at 1.1275 (July 18).
It’s worth mentioning that as long as the EUR/USD continues below the 200-day SMA, the pair is likely to fall further.
