The EUR/USD currency pair today is still trading near 1.1700, a sign that the largest currency pair in the world is taking a step back after recent highs. On Friday, the duo maxed out at 1.1742. It has since relaxed a bit and is now trading at the top of that range. This movement represents a short-term pause in the bullish movement’s momentum as the run continues, with most sentiment still leaning highly bullish.
As we’ve seen in the past few trading days, the EUR/USD pair traded relatively strongly. The daily chart shows that although bullish momentum has slowed, the bulls still clearly have control over the market. Looking at technical analysis, the pair is technically rated neutral-to-bullish on the short term. This decision is based on our technical analysis of the 4-hour chart. The EUR/USD is overwhelmingly positive as it is trading above all its moving averages. This positions it as one of the greatest assets, offering compelling proof of its present-day robustness.
The 20 Simple Moving Average (SMA) for EUR/USD hovers around 1.1620, an important line of potential support or resistance for trends traders seeking to make money on brief exchanges. Most significantly, the 100 SMA is sloping gently higher, showing an overall upward bias in the long-term outlook. The 20 SMA is gradually increasing above the longer moving averages, a sign that bullish sentiment could continue if this trend persists.
Unsurprisingly, traders are watching important resistance and support levels as they continue to drive future price movements. Main EURUSD resistance seen at 1.1740, 1.1785, 1.1825. On the other hand, 1.1660, 1.1620 and 1.1570 are support levels. These new levels will be very important to all market participants as they weather the upcoming potential volatility in the next few days.
The past month’s movement of the EUR/USD currency pair underscores these shifting expectations. These changes are all shaped by the Federal Reserve’s interest rate policies. The market has adjusted to new expectations regarding the timing of a first Fed interest rate cut. As a result, this has introduced volatility into the exchange rate between the U.S. dollar and the euro.
The new German IFO survey does not help to clarify this confusing backdrop. This means the Business Climate went up to 89, an increase from July’s 88.6. This improvement further demonstrates the growing confidence among German businesses and should help strengthen the euro’s value in the long-term. Expectations in the same survey surged to 91.6, exceeding the expected reading of 90.2 by a wide margin. This recent upturn comes as good news amid concerns of a potential economic slowdown in Germany.
The August IFO survey results suggest that sentiment within the business community is strengthening, which could have implications for future market trends and investor confidence in the eurozone economy. As such, analysts will be observing how these developments interact with ongoing discussions around U.S. monetary policy and its impact on currency valuations.