EUR/USD Current price: 1.1127
- Financial markets struggle for direction following Fed’s aggressive rate cut.
- Better-than-anticipated United States data provided fresh impetus to the US Dollar.
- EUR/USD eases from intraday highs, but a steeper decline is out of the picture for now.
The EUR/USD pair resumed its advance after bottoming at 1.1067 during Asian trading hours and trades as high as 1.1178, as optimism maintained the US Dollar under selling pressure throughout the first half of the day. Financial markets are still coping with the latest Federal Reserve (Fed) monetary policy decision, as the central bank announced a 50 basis points (bps) interest rate cut on Wednesday, the first in four years. The USD fell with the headline but trimmed losses afterwards, only to fall again with the new day.
Generally speaking, the Fed maintained a cautious approach to future interest rate moves, refraining from anticipating a cycle of aggressive trims. On the contrary, Chairman Jerome Powell repeated that officials will remain data-dependent. But it is clearly the beginning of a new cycle. The Summary of Economic Projections (SEP) showed additional rates are coming this year and the next ones. And why the document is no guarantee, it reflects their intentions, that is, to return to a more neutral” rate. For sure, stock markets welcomed the news, as global indexes are up with the news, leading to sharp gains among US futures.
Meanwhile, the USD gathered modest momentum ahead of Wall Street’s opening following the release of US data. The country released the Q2 Current Account, which posted a deficit of $266.8 billion, slightly worse than anticipated. At the same time, Initial Jobless Claims for the week ended September 13 improved to 219K while the Philadelphia Fed Manufacturing Survey printed at 1.7 in September, much better than the previous -7 or the expected -1. The ruling positive mood should limit USD gains in the upcoming American session.
EUR/USD short-term technical outlook
From a technical point of view, the EUR/USD pair hovers around 1.1130, retaining its positive bias. The daily chart shows that uncertainty remains, as, for a second consecutive day, the pair has been trading inside an extended range but has not found its way. Technical indicators in the mentioned chart suggest the risk for EUR/USD skews to the upside, as they remain within positive levels and with uneven upward strength. Also, a flat 20 Simple Moving Average (SMA) at around 1.1090 provides support, with buyers quickly appearing on dips below it.
In the near term, EUR/USD is losing its upward strength but is far from bearish. Technical indicators turned south but hold above their midlines. At the same time, a bullish 20 SMA keeps advancing beyond the 100 and 200 SMAs, with the longer one also gaining upward traction. The pair needs to break through 1.1050 to actually turn bearish, an unlikely scenario at the time being.
Support levels: 1.1090 1.1050 1.1010
Resistance levels: 1.1160 1.1200 1.1250
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
AUD/USD remains supported by 0.6700
AUD/USD traded on the back foot, adding to Monday’s decline, although meeting decent contention around the 0.6700 barrier on Tuesday, all against the backdrop of a tepid upside bias in the US Dollar.
EUR/USD now targets the 200-day SMA
Extra weakness dragged EUR/USD to levels last seen in August around 1.0880 in response to the still unabated march north in the Greenback and rising cautiousness ahead of the ECB’s rate decision later in the week.
Gold holds on to modest gains around $2,660
Gold clings to small gains above $2,650 on Tuesday after closing the first day of the week virtually unchanged. Growing signs of an economic downturn in the Chinese economy makes it difficult for XAU/USD to gather recovery momentum.
XRP back above $0.54 as Ripple makes key announcements at Swell 2024
Ripple (XRP) holds steady above key support at $0.54 on Tuesday as payment remittance firm Ripple makes announcements regarding exchange partners for its stablecoin RLUSD that is in the final stages of its launch.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.