EUR/USD continues its struggle to find a direction

The EUR/USD is being squeezed in a narrowing price range or the pennant pattern.
Friday's US non-farm payrolls figure could trigger a much-awaited range breakout.

Omkar Godbole FXStreet Contributor

The EUR/USD could be in for a big move soon, having spent more 1.5-month in the narrowing price range or pennant pattern.

As of writing, the top end of the pennant is seen at 1.1723 and the lower end is located at 1.1608. The currency pair will likely adopt a strong bullish/bearish bias depending on the direction of the breakout as longer the duration of the consolidation, bigger the breakout (bull/bear) tends to be.

However, the pennant breakout may not happen today as the Eurozone economic calendar is light. Meanwhile, no first tier data are scheduled for release in the US.

As a result, the EUR/USD pair will likely continue trading the ever-tightening ranges and could see a big breakout after tomorrow's non-farm payrolls release.

A big miss on the payrolls and wage growth figure could trigger a bullish pennant breakout. The currency pair has created back-to-back doji candles along the 20-month moving average, signaling indecision among the bears. So, it is safe to say the odds are stacked in favor of a bullish move.

That said, an above-forecast reading would put the focus bank on the Fed-ECB divergence and could yield a downside break of the pennant setup.

EUR/USD Technical Levels

At press time, the currency pair is trading at 1.1650, having clocked a high of 1.17 on Wednesday.

Resistance: 1.1673 (50-day MA), 1.1723 (pennant resistance), 1.1852 (June 14 high).

Support: 1.1608 (pennant support), 1.1575 (July 19 low), 1.1508 (June 21 low).\

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Oversold	High
1H	Strongly Bearish	Oversold	Shrinking
4H	Strongly Bearish	Oversold	Low
1D	Bearish	Neutral	Low
1W	Bearish	Neutral	Expanding
Updated Aug 2, 04:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.