USD Technical Analysis
- EUR/USD rides the post CPI wave higher. Euro longs (CoT report) continue to ease
- Cable runs the risk of overheating after UK election, US CPI catalysts
- AUD momentum slows after Chinese economy takes a step back
- Elevate your trading skills and gain a competitive edge. Get your hands on the U.S. dollar Q3 outlook today for exclusive insights into key market catalysts that should be on every trader’s radar:
EUR/USD Rides the Post US CPI Wave Higher
With the French legislative elections behind us the euro has enjoyed renewed vigor – largely off the back of a sharp dollar decline as the expectation of a Fed cut in September is almost fully priced in.
EUR/ USD has risen around 250 pips from the late June low, taking out the 50 and 200-day simple moving average s (SMA) with ease. The pair now has a major resistance zone in its sight – the zone between 1.0942 and 1.0960. The two levels correspond with the 50% and 61.8% Fibonacci retracements of the 2021 -2022 descent and the 2023 major decline. The zone of resistance has contained bullish momentum for most of this year with just two momentary breaches – albeit on an intra-day basis only.
Bullish momentum may encounter resistance ahead of the major zone after tagging the June swing high 1.0916, with the RSI indicator getting perilously close to overbought territory.
Jerome Powell’s speech later this afternoon may assist EUR/USD if he maintains the slightly dovish tone he adopted during his two-day testimony last week. However, tomorrow’s potentially softer ZEW economic sentiment could weigh on the pair which could aid a pullback.
EUR/USD Daily Chart
