- EUR/USD faced extra downside pressure and approached 1.0900.
- The Dollar maintained its weekly recovery on the back of the weak Yen.
- Industrial Production in Germany came in above estimates in June.
On Wednesday, EUR/USD met further selling interest, adding to Tuesday’s pullback and revisiting the key 1.0900 neighbourhood on the back of the continuation of the US Dollar’s (USD) weekly comeback and a generally positive tone in global stock markets.
Regarding the Greenback, the USD Index (DXY) rose further north of the 103.00 mark after a steep drop to the 102.00 region on Monday. This rebound was supported by an extra depreciation in the Japanese yen and another positive day in US yields across the board.
Adding to the upbeat sentiment for the Greenback, concerns over an inter-meeting rate cut by the Fed evaporated, helped at the same time by recent comments from Fed rate-setters A. Goolsbee and M. Daly, who suggested on Tuesday that markets might have overinterpreted recent US labour market data, ruling out a recession but hinting at potential rate reductions to avoid such an outcome.
In the German money market, 10-year bund yields extended their weekly bounce and confronted the 2.30% region, in line with the trend in global yields.
Still around the Dollar and the Fed, markets now see an increased probability of a 50 bps rate cut in September. According to CME Group’s FedWatch Tool, there is nearly a 65% chance of this move next month.
If the Fed implements more significant rate cuts, the policy divergence between the Fed and the ECB could narrow in the medium term, which may support further gains in EUR/USD.
In the longer run, however, the US economy is expected to outperform its European counterpart, suggesting that any weakness in the Greenback may be temporary.
EUR/USD daily chart
EUR/USD short-term technical outlook
Further north, EUR/USD is expected to dispute the August top of 1.1008 (August 5), ahead of the December 2023 peak of 1.1139 (December 28).
On the downside, the pair's next target is the 200-day SMA at 1.0830, prior to the weekly low of 1.0777 (August 1) and the June low of 1.0666 (June 26), all of which occurred before the May low of 1.0649 (May 1).
Looking at the big picture, the pair's positive bias should hold if it remains above the key 200-day SMA in a sustained manner.
So far, the four-hour chart shows some consolidative action. The initial resistance level is at 1.1008 ahead of 1.1132. On the other hand, immediate contention is at 1.0903 ahead of the 200-SMA of 1.0828, and 1.0777. The relative strength index (RSI) gyrated around 55.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks

EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.

GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.

Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.

Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.

Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.