EUR/USD Forecast: Bears maintain the pressure as the focus shifts to US employment
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Subscribe to PremiumEUR/USD Current Price: 1.0475
- Hawkish comments from US Federal Reserve officials triggered risk-off trading.
- Market participants await United States employment-related data ahead of the NFP report.
- EUR/USD pressures fresh 2023 lows as fears back demand for the American currency.
The EUR/USD pair traded as low as 1.0459 on Tuesday, bouncing modestly from the level but holding below the 1.0500 threshold. The US Dollar benefited from hawkish comments from Loretta Mester, President of the Cleveland Federal Reserve (Fed). Mester said on Monday that inflation remains “too high,” adding that the central bank may need to raise interest rates again this year and keep rates high “for some time.”
Other officials added fuel to the fire with also hawkish words. Federal Reserve Governor Michelle Bowman supported additional rate hikes amid too-high inflation, although she is not a voting member this year. Finally, Fed Vice Chair for Supervision Michael Barr noted that the crucial question these days is for how long the central bank would need to keep rates at a sufficiently restrictive level. The headlines spook speculative interest, pushing stock markets further into the red while underpinning demand for the safe-haven USD.
Meanwhile, European Central Bank (ECB) Chief Economist Philip R. Lane spoke in Lithuania and said food inflation is still a substantial issue, while services inflation is a big contributor to persistent price pressures. Governing Council member Gediminas Simkus, however, sounded a bit more optimistic, as he said that the prompt response of monetary policy was effective and inflation is on its way down, despite the inflation shock is not yet over and still facing many lines of resistance.
Data-wise, the EU did not publish relevant data, while the United States (US) will offer some relevant employment-related figures. The country will release the August JOLTS Job Openings report, expected to show 8.8 million openings at the end of the month, stable from the previous 8.82 million. Also, the country will publish the October IBD/TIPP Economic Optimism Index.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows that it stands near the multi-month low posted at the beginning of the day, with no signs of downward exhaustion. The 20 Simple Moving Average (SMA) maintains its firmly bearish momentum, currently at around 1.0636, while the longer moving averages slowly grind south above the 1.0800 threshold. Technical indicators, in the meantime, consolidate near oversold readings, lacking directional strength.
In the near term, and according to the 4-hour chart, the bearish case remains firm in place. Technical indicators head firmly south within negative levels, resuming their slides after a modest upward correction. Meanwhile, EUR/USD develops below evenly bearish moving averages, with the 20 SMA providing dynamic resistance at around 1.0540.
Support levels: 1.0455 1.0410 1.0375
Resistance levels: 1.0495 1.0540 1.0590
EUR/USD Current Price: 1.0475
- Hawkish comments from US Federal Reserve officials triggered risk-off trading.
- Market participants await United States employment-related data ahead of the NFP report.
- EUR/USD pressures fresh 2023 lows as fears back demand for the American currency.
The EUR/USD pair traded as low as 1.0459 on Tuesday, bouncing modestly from the level but holding below the 1.0500 threshold. The US Dollar benefited from hawkish comments from Loretta Mester, President of the Cleveland Federal Reserve (Fed). Mester said on Monday that inflation remains “too high,” adding that the central bank may need to raise interest rates again this year and keep rates high “for some time.”
Other officials added fuel to the fire with also hawkish words. Federal Reserve Governor Michelle Bowman supported additional rate hikes amid too-high inflation, although she is not a voting member this year. Finally, Fed Vice Chair for Supervision Michael Barr noted that the crucial question these days is for how long the central bank would need to keep rates at a sufficiently restrictive level. The headlines spook speculative interest, pushing stock markets further into the red while underpinning demand for the safe-haven USD.
Meanwhile, European Central Bank (ECB) Chief Economist Philip R. Lane spoke in Lithuania and said food inflation is still a substantial issue, while services inflation is a big contributor to persistent price pressures. Governing Council member Gediminas Simkus, however, sounded a bit more optimistic, as he said that the prompt response of monetary policy was effective and inflation is on its way down, despite the inflation shock is not yet over and still facing many lines of resistance.
Data-wise, the EU did not publish relevant data, while the United States (US) will offer some relevant employment-related figures. The country will release the August JOLTS Job Openings report, expected to show 8.8 million openings at the end of the month, stable from the previous 8.82 million. Also, the country will publish the October IBD/TIPP Economic Optimism Index.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows that it stands near the multi-month low posted at the beginning of the day, with no signs of downward exhaustion. The 20 Simple Moving Average (SMA) maintains its firmly bearish momentum, currently at around 1.0636, while the longer moving averages slowly grind south above the 1.0800 threshold. Technical indicators, in the meantime, consolidate near oversold readings, lacking directional strength.
In the near term, and according to the 4-hour chart, the bearish case remains firm in place. Technical indicators head firmly south within negative levels, resuming their slides after a modest upward correction. Meanwhile, EUR/USD develops below evenly bearish moving averages, with the 20 SMA providing dynamic resistance at around 1.0540.
Support levels: 1.0455 1.0410 1.0375
Resistance levels: 1.0495 1.0540 1.0590
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