EUR/USD Forecast: Bulls retain control as optimist persists

EUR/USD Current price: 1.1036

• Dovish words from Federal Reserve’s Neel Kashkari put pressure on the US Dollar.
• The Jackson Hole Symposium by the end of the week could shed light on monetary policies.
• EUR/USD maintains a positive tone, although bulls turned cautious.

The EUR/USD pair extended its advance to a fresh 2024 high of 1.1049 on Monday and trades nearby amid persistent risk appetite. Markets turned optimistic last week, as easing inflationary pressures in the United States (US) somehow confirmed an upcoming Federal Reserve (Fed) interest rate cut in September, while US data showed the local economy remains resilient, and concerns about a recession somewhat receded.

The absence of relevant macroeconomic data and upcoming first-tier events by the end of the week, however, limits the EUR/USD intraday range. The European calendar remained empty, while the US has nothing relevant to offer. Still, and ahead of Wall Street’s opening, Fed Bank of Minneapolis President Neel Kashkari noted that inflation is making progress, although the labor market is showing some concerning signs. “The balance of risks has shifted more towards labor market and away from the inflation side of our dual mandate,” Kashkari said.

Fed Board member Christopher Waller will be on the wires early in the American session and could make some comments on monetary policy. Other than that, the focus will be on the Purchasing Managers Indexes (PMIs) to be released on Thursday and the Jackson Hole Symposium starting Friday.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair shows bulls retain control but with a cautious approach. Technical indicators have turned flat near overbought readings, far from suggesting upward exhaustion. At the same time, the pair keeps developing well above all its moving averages, with the 20 Simple Moving Average (SMA) gaining bullish traction above the longer ones at around 1.0900.

The near-term picture is quite alike. In the 4-hour chart, technical indicators turned flat, although the Relative Strength Index (RSI) indicator stands near overbought readings while the Momentum indicator holds within neutral levels. At the same time, all moving averages aim higher below the current level, reflecting bulls' dominance around EUR/USD.

Support levels: 1.0985 1.0950 1.0900  

Resistance levels: 1.1045 1.1090 1.1120