EUR/USD Analysis: consolidating at July’s lows ahead of ECB

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1212

Data this week likely be overshadowed by central banks’ decisions.
A scarce macroeconomic calendar and upcoming ECB announcement keeping investors sidelined.
EUR/USD at risk of retesting the yearly low at 1.1106 on a break below 1.1180.

The EUR/USD pair has spent most of this Monday confined to a tight range around 1.1210, unable to attract speculative interest and closing the day with modest losses. The American dollar grabbed some attention at the weekly opening, as risk aversion sent investors into safe-haven assets. The common currency, on the other hand, is out of buyers’ radar ahead of the ECB monetary policy decision later this week, as market players are anticipating more dovishness from European policymakers.

The macroeconomic calendar was quite scarce at the beginning of the week, as no data were coming from Europe, while the US just released the June Chicago Fed National Activity Index, which resulted in -0.02, much worse than the 0.10 expected, and slightly better than May’s -0.05. This Tuesday, the US will release the May Housing Price Index, Existing Home Sales for June and the Richmond Fed Manufacturing index for July. The EU will publish the preliminary estimate of July’s Consumer Confidence, seen unchanged at -7.2. Currencies this week will likely be about central banks rather than data.

EUR/USD short-term technical outlook

The EUR/USD pair has been consolidating at the lower end of July’s range, confined to a 20 pips’ range. The risk remains skewed to the downside, as the pair developed below the 23.6% retracement of its July’s decline at 1.1245. Technical readings in the 4 hours chart are aligned with the longer-term perspective, as the pair remains below all of its moving averages, and with the 100 SMA extending its decline below the 200 SMA, this last, converging with the 38.2% retracement of the same decline at around 1.1280. Technical indicators in the mentioned chart stand within negative levels, with moderate downward slopes, falling short of confirming another leg south. The pair bottomed at 1.1192 in July and at 1.1181 in June, with a break below this last probably opening doors for a test of the yearly low at 1.1106. The bearish case could be denied if the pair surges beyond the mentioned 1.1280 price zone.

Support levels: 1.1180 1.1150 1.1106

Resistance levels: 1.1245 1.1280 1.1315

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold trims gains, recedes to the sub-$4,600 area

Gold rapidly leaves behind Thursday’s inconclusive price action and advances markedly on Friday, briefly surpassing the $4,600 mark per troy ounce to hit three-month peaks. Meanwhile, the precious metal’s solid performance comes despite marginal gains in the buck coupled with another day of rising US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls accelerate rally amid rising ETF inflows

The cryptocurrency market remains bullish on Friday, led by Bitcoin’s surge above $77,000. Altcoins, including Ethereum and Ripple, mirror BTC’s positive outlook, trading near $2,400 and $1.35, respectively.

Week ahead – Fed’s Jackson Hole and Nvidia earnings to dictate markets

Kevin Warsh to make his Jackson Hole debut amid confusing messaging. But a major hawkish surprise unlikely after bond market intervention. Nvidia earnings to also determine market direction as stock rally cools.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.