EUR/USD Forecast: Still looking bullish after the small correction

The EUR/USD kicked off the week with a retreat from the highs.
Markets are still digesting Powell's words at Jackson Hole.
The technical picture is bullish for the pair.

Yohay Elam FXStreet

The EUR/USD is trading around 1.1600, slightly lower on the day. Movements are limited as the UK enjoys a bank holiday and liquidity is more depressed.

The US Dollar is recovering after dropping on Friday. Fed Chair Jerome Powell was relatively dovish in his speech at Jackson Hole. He signaled further gradual hikes but conditioned them on ongoing growth in GDP and jobs. Also, he does not see inflation as accelerating or the economy overheating.

While a September hike is a done deal, and December is quite probable, further moves are now in doubt. His words weighed on the greenback.

Turkey is back to full swing after a weeklong holiday. The Turkish Lira resumed its falls, and this slightly weighs on the global mood. The USD/TRY remains far from the 7.00 level seen at the peak of the crisis.

Markets remain concerned about the next moves of the US in its trade spat with China. Talks ended inconclusively last week, and the Administration is set to impose new duties next week.

The German IFO Business Climate beat expectations with 103.6 points. The trade truce is cited as one of the reasons for the improvement in business confidence in the continent's largest economy. EU Commission President Jean-Claude Juncker and US President Donald Trump met in late July and agreed to put new tariffs on hold.

Italy said it would veto the EU Budget if its worries about migration are not addressed. Many believe a compromise will be reached.

The calendar is void of top-tier indicators today, but US GDP and euro-zone inflation stand out later in the week,

EUR/USD Technical Analysis

The EUR/USD is trading within uptrend support and uptrend resistance that are not parallel. So far, the pattern holds. The pair broke above the 200 Simple Moving Average on the four-hour chart. Momentum is slightly positive, and the Relative Strength Index is out of overbought territory. All in all, this is a bullish bias.

1.1625 held the pair down last week. Further up, 1.1655 was the high point last week. 1.1720 and 1.1750 are the next levels to watch.

1.1595 was a low point earlier in the day and capped the EUR/USD in the past. More significant support is at 1.1530, where the latest rally began. 1.1490 was a swing low last week.

More: Is the US economy peaking out? Too many indicators are going in the wrong direction

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.