EUR/USD Price Forecast: US Dollar runs on upbeat data

EUR/USD Current price: 1.1478

• The United States economy grew at a faster-than-anticipated pace in Q2.
• The US ADP report showed the private sector added 104K new positions in July.
• EUR/USD is oversold in the near term, but lower lows are in sight.

The EUR/USD pair fell below the 1.1500 level early in the American session, with demand for the US Dollar (USD) boosted by upbeat United States (US) data. The country published the ADP Employment Change report, which showed that the private sector added 104K new positions in July, much better than the 78K expected. June reading was revised to -23K, better than the -33K initially reported.

Furthermore, the country reported that the economy grew at a faster-than-anticipated rate in the second quarter of the year, according to the preliminary estimate of the Q2 Gross Domestic Product (GDP). The economy expanded at an annual rate of 3% in the second quarter, much better than the 2.4% anticipated or the -0.5% from Q1.

The core Personal Consumption Expenditures (PCE) Price Index rose by 2.5% in the same quarter, down from the 3.5% posted in the three months to March.

Solid growth, strong job creation and easing inflationary pressures mean the Federal Reserve (Fed) had plenty of room to trim interest rates. The central bank is undergoing a two-day meeting, and will announce its decision in the American afternoon. Still, the central bank is widely anticipated to keep interest rates on hold, as Chair Jerome Powell and co fear US President Donald Trump's tariffs will have a negative impact on economic developments.

The decision could spur Trump’s anger, who has been demanding lower interest rates for months.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is poised to extend its slump. The pair is trading at its lowest in over a month, with technical indicators accelerating their slides within negative levels, anticipating lower lows ahead. The 20 Simple Moving Average (SMA) in the meantime, gains downward strength well-above the current level, while a former bullish 100 SMA now loses upward strength at around 1.1350.

The near-term picture is also bearish. Technical indicators in the 4-hour chart resumed their slides, with the Relative Strength Index (RSI) indicator currently at around 25 and without signs of downward exhaustion. Finally, a firmly bearish 20 SMA extends its slide below directionless 100 and 200 SMAs, in line with the ongoing selling momentum.

Support levels: 1.1470 1.1420 1.1385

Resistance levels: 1.1510 1.1555 1.1600