EUR/USD Forecast: Buyers losing interest ahead of FOMC Minutes

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0602

United States Federal Reserve officials' comments keep leading the sentiment.
German annual Harmonized Index of Consumer Prices confirmed at 4.3% in September.
EUR/USD retains a mildly bullish stance in the near term, needs to run past 1.0650.

Financial markets stabilized on Wednesday, with the US Dollar giving up fear-inspired gains on the back of dovish comments from US Federal Reserve (Fed) officials. The EUR/USD pair consolidates around the 1.0600 figure, not far below a fresh weekly high of 1.0628.

The USD strengthened at the beginning of the week following the declaration of war between Israel and the Palestinian Hamas group. The American currency found additional support in comments from different Fed officials, who suggested that higher government bond yields somehow offset the need to tighten further. The odds for one more rate hike before year-end in the United States (US) fell, damaging demand for the USD to benefit high-yielding assets.

However, Federal Reserve Governor Michelle Bowman said on Wednesday that despite some progress on inflation, the central bank will probably need to tighten monetary policy further to restore price stability.

Across the pond, European Central Bank (ECB) Governing Council member Klaas Knot noted that financial stability is a crucial condition for price stability, adding that restrictive policies will be needed for some time and that European policymakers are ready to adjust rates further if disinflation stalls.

A scarce macroeconomic calendar and a holiday in the US and Canada on Monday maintain major pairs within limited intraday ranges, although some interesting figures started coming out during European hours. Germany published the final estimate of the September Harmonized Index of Consumer Prices (HICP), which was confirmed at 4.3% YoY. The US unveiled the September Producer Price Index (PPI), showing wholesale price pressures were up by 0.5% MoM and 2.2% YoY, higher than expected. The core annual figure was up to 2.7% from 2.2% in the previous month.

Speculative interest will now wait for the September meeting's US Federal Open Market Committee (FOMC) Minutes. The document will probably have a limited impact on financial markets, as it would not bring fresh clues to the trading table.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows it posted a higher high and a higher low, but it trades around its opening level. It holds a handful of pips above a bearish 20 Simple Moving Average (SMA) while the longer moving averages remain directionless, far above the current level. At the same time, technical indicators turned flat below their midlines, suggesting decreased buying interest.

In the near term, and according to the 4-hour chart, EUR/USD retains a mildly bullish technical stance. The pair is consolidating above its 20 and 100 SMAs, with the shorter one aiming to cross above the longer. Finally, technical indicators remain within positive levels, with the Momentum recovering but the Relative Strength Index (RSI) losing ground at around 58.

Support levels: 1.0585 1.0540 1.0495

Resistance levels: 1.0650 1.0690 1.0725

View Live Chart for 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.

AUD/USD holds steady near 0.7200 amid escalating US-Iran tensions

AUD/USD consolidates just below its highest level since mid-May, touched on Friday, and hovers around 0.7200 at the start of a new week amid mixed cues. Hawkish RBA expectations continue to act as a tailwind for the Aussie. Meanwhile, the upbeat US NFP report lifted Fed rate hike bets, which, along with escalating US-Iran tensions, underpins the safe-haven US Dollar and caps the currency pair.

USD/JPY collapses to seven-month lows near 154.00

USD/JPY extends its decline on Monday, sliding to the area of seven-month lows near the 154.00 neighbourhood, all amid an increasingly hawkish repricing of the BoJ’s policy outlook and repatriation chatter.

Gold bounces off lows, back above $4,400

Gold builds on Friday’s losses, although it manages to regain some composure and reclaim the $4,400 mark per troy ounce on Monday. The yellow metal’s decline follows the move lower in the Greenback and steady caution ahead of key US data releases toward the end of the week.

Bittensor: TAO eyes $300 amid launch on Raydium, parody meme coin, ChatGPT-6 Astra release

Bittensor is trading in the green on Monday, continuing a steady upward trend over the last five days, with a 25% gain. Social chatter surrounding Bittensor is increasing amid a similarly named meme coin launched on Solana and the release of ChatGPT-6 Astra. The technical outlook for TAO is bullish as momentum strengthens and buyers target the $300 breakout.

Strong US jobs, Middle East tensions and key inflation data ahead

Good morning all, hope you enjoyed your weekend. Markets are starting the week after Friday’s stronger-than-expected US jobs report, which increased expectations that the Fed could raise rates at its September meeting. However, US markets are closed today for the Labor Day holiday, so liquidity should be lower and we may see slower price action.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.