EUR/USD Price Forecast: Bears doubt ahead of 1.1500

EUR/USD Current price: 1.1531

• San Francisco Fed’s Mary Daly reinforced the idea of a rate cut in September.
• Growth in the Eurozone expanded, yet at a slow pace in July, according to HCOB.
• EUR/USD trades with a modest bearish bias, still holding above the 1.1500 mark.

Major pairs keep trading within tight ranges on Tuesday, although moderated US Dollar (USD) demand pushed EUR/USD down to 1.1530. Markets remain mildly optimistic about a potential Federal Reserve (Fed) interest rate cut in September.

Fed’s San Francisco President Mary Daly reinforced the idea late on Monday, when she noted that mounting evidence that the US job market is softening, and no signs of tariff-driven inflation translate into a soon-to-come interest rate cut.

The better mood is also being backed by news that the EU has put on hold counter tariffs on the United States (US), which were set to take effect this week. EU Commission President, Ursula von der Leyen, announced a six-month window to allow for trade talks.

Early on Tuesday, the Hamburg Commercial Bank (HCOB) released the final estimates of the July Services Purchasing Managers’ Index (PMI), which was confirmed at 51.0 in the month, higher than the 50.5 printed in June. The Composite PMI resulted at 50.9, better than the previous 50.6 but below the preliminary estimate of 51.0.

The official report showed that, while the Eurozone economy continued its expansionary trend in the second half of the year, “the rate of increase in business activity remained sluggish and was weaker than the survey average as stagnant demand held back output.”

Other than that, the EU published the June Producer Price Index (PPI), which rose by 0.8% in the month, and by 0.6% from a year earlier.

The American session will bring the US S&P Global Services and Composite PMIs, and the official ISM Services PMI for July.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair shows it is marginally lower for a second consecutive day, with technical readings favouring a downward extension. The pair remains below a mildly bearish 20 Simple Moving Average (SMA), providing dynamic resistance at around 1.1630. Meanwhile, technical indicators gyrate lower after failing to overcome their midlines, in line with increased selling pressure. Finally, the 100 SMA remains below the current level, although losing its bullish momentum, in line with decreased buying interest.

In the near term, and according to the 4-hour chart, the risk of a decline seems limited. EUR/USD trades below the 100 and 200 SMAs, but a bullish 20 SMA lies at around 1.1505, and will probably attract buyers if reached. Technical indicators, in the meantime, head nowhere within positive levels, down from their weekly peaks.

Support levels: 1.1505 1.1470 1.1420

Resistance levels: 1.1560 1.1600 1.1630

(This story was corrected on August 6 at 01:40 GMT to fix the misspelled name of San Francisco Fed President Mary Daly.)