EUR/USD regains the 1.18 area ahead of data


  • EUR/USD manages to bounce off lows in the 1.1740/35 band.
  • The greenback picks up pace in the wake of the FOMC event.
  • Final EMU CPI figures, US Initial Claims next of note in the calendar.

The single currency is extending the bearish note in the second half of the week, with EUR/USD initially dropping and testing fresh monthly lows in the vicinity of 1.1740.

EUR/USD offered post-FOMC, focuses on data

EUR/USD has managed to regain buying pressure after visiting the 1.1740/35 band during the Asian trading hours, as market participants were adjusting to the latest message from the Federal Reserve at its Wednesday’s event.

In fact, the greenback gained momentum after the FOMC delivered an upbeat assessment of the ongoing economic recovery despite strengthening the “lower for longer” stance from the Fed. Indeed, and according to the “dots plot”, the next interest rate hike is expected to be delivered not before 2024.

Data wise in the euro area, final inflation figures for the month of August are next on tap. Across the pond, weekly Claims should take centre stage along with the Philly Fed manufacturing gauge and housing data results.

Looking at the euro futures markets, investors reduced their open interest positions sharply on Wednesday (according to data from CME Group) amidst the negative performance of EUR/USD. That said, a deeper pullback seems to lack conviction among traders, therefore leaving the door open for the continuation of the bullish trend in the near-term.

What to look for around EUR

EUR/USD dropped and recorded fresh monthly lows near 1.1740 following the FOMC gathering on Wednesday. Despite the move, the pair’s outlook remains positive and bouts of weakness are so far deemed as short-lived and look contained. In addition, the improved sentiment in the risk-associated universe, auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as a calmer US-China trade front are all underpinning the constructive view on the single currency. The solid positive stance in the speculative community, the latest message from the ECB and the euro area’s current account position also collaborate with this view on the currency.

EUR/USD levels to watch

At the moment, the pair is losing 0.09% at 1.1805 and faces the next support at 1.1737 (monthly low Sep.17) seconded by 1.1709 (38.2% Fibo of the 2017-2018 rally) and finally 1.1695 (monthly low Aug.3). On the other hand, a break above 1.1965 (monthly high Aug.18) would target 1.2011 (2020 high Sep.1) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD trades at fresh September lows

Risk-aversion is the main theme this Monday, amid resurgent coronavirus cases in the Old Continent and the announcement of  new lockdowns. ECB’s Lagarde said the economic recovery in the EU is “very uncertain, uneven and incomplete.”

EUR/USD News

GBP/USD extends slump sub-1.2800

The Pound plunged on a dismal market mood, as PM Johnson acknowledged the kingdom is undergoing a second coronavirus wave. GBP/USD trades at one-week lows around 1.2800.

GBP/USD News

XAU/USD bullish bias starting to fade

Gold prices are testing the bull's commitments at the support structure around $1,906 in what could be a final test before the next leg higher of the bullish trend.

Gold News

Bitcoin needs to defend critical support level at $10,600

Bitcoin was trading inside an ascending triangle pattern between September 3 and September 15, which is created when the price establishes higher lows and a horizontal trendline around the swing highs. 

Read more

WTI plummets to $39, down more than 4%

Crude oil prices closed the previous week sharply higher but erased a large portion of those gains on Monday. As of writing, the barrel of West Texas Intermediate was down 4.2%, the biggest daily percentage decline in nearly two weeks, at $39.15.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures