EUR/USD Outlook: extended consolidation expected ahead Powell's speech in Jackson Hole

Slobodan Drvenica Windsor Brokers

EUR/USD

The Euro bounces to 1.11 zone in early European trading on Thursday, helped by better than expected German PMI data (Mfg Aug 43.6 vs 43.0 f/c; Services Aug 54.4 vs 54.1 f/c) that partially offsets negative impact from less hawkish than expected Fed minutes and political turmoil in Italy. Fresh strength attacks again key levels just above 1.11 barrier, which capped upside attempts in past four days, keeping bearish bias. Repeated close below 1.11 would keep the downside vulnerable, as current consolidation is forming bearish flag continuation pattern, completion of which (under 1.11 zone barriers) would open way for test of 1 Aug spike low at 1.1027 and psychological 1.10 support. Extended range trading can be expected as markets await key event of the week – the speech of Fed Chairman Jerome Powell in Jackson Hole symposium on Friday, expecting more information about Fed's next steps regarding US interest rates. Daily studies remain bearishly aligned as momentum is attempting to break into negative territory and 10/20DMA's formed bear-cross, although stochastic is heading north and reduces negative signals. Lift above 1.1100/13 zone would expose a cluster of key barriers at 1.1128/37 zone (10DMA/Fibo 38.2% of 1.1249/1.1066 / 20DMA), break of which provide relief and signal formation of higher base at 1.1066.

Res: 1.1113; 1.1128; 1.1137; 1.1162
Sup: 1.1075; 1.1066; 1.1027; 1.1000

Interested in EUR/USD technicals? Check out the key levels

1. R3 1.113
2. R2 1.1119
3. R1 1.1102
PP 1.1091
1. S1 1.1074
2. S2 1.1063
3. S3 1.1045

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD treads water above 1.1850 amid thin trading

EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.

GBP/USD flat lines as traders await key UK and US macro data

GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold sticks to intraday losses; lacks follow-through

Gold remains depressed through the early European session on Monday, though it has managed to rebound from the daily trough and currently trades around the $5,000 psychological mark. Moreover, a combination of supporting factors warrants some caution for aggressive bearish traders, and before positioning for deeper losses.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.