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26/08/24
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EUR/USD Pauses Below 1.1200: Bullish Momentum Maintains Amid USD Weakness
The EUR/USD currency pair is currently trading within a narrow range just below the 1.1200 level as Monday begins. This extended consolidation phase follows a notable surge that brought the pair to its highest value in over a year. The recent technical indicators imply that the overall bullish trend is still active, though there may be potential for a short-term correction prior to any further upward movement.
Recently, the US Dollar has faced significant selling pressure, particularly following remarks made by the Federal Reserve Chairman during the Jackson Hole Economic Symposium. His statements indicated a readiness to adjust monetary policy to bolster labor market strength while continuing to address price stability. This acknowledgment contributed to a decline in U.S. Treasury bond yields, resulting in a weakened dollar against other major currencies.
As the week starts, the cautious sentiment in the market has limited the losses of the USD, thereby creating challenges for the EUR/USD pair in maintaining its upward trajectory. Investors are now focused on upcoming economic data, particularly the Durable Goods Orders report for July, which is set to be released by the U.S. Census Bureau later in the day. Market predictions point toward a 4% increase in Durable Goods Orders, a rebound from the previous month’s 6.7% decline. A figure exceeding expectations could result in a strengthening of the USD amid immediate market reactions.
From a technical perspective, the Relative Strength Index (RSI) on the four-hour chart remains stable near the 70 level, indicating that the EUR/USD pair is experiencing a correction after reaching nearly 80. Despite this, the pair is still securely nestled within an upward trend channel and remains above the 20-period Simple Moving Average, suggesting a continued bullish sentiment. Key support levels to watch include 1.1150, followed by 1.1100 and 1.1080, while resistance is seen at 1.1200, 1.1230, and 1.1260.
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