The EUR/USD exchange rate finds it hard to hold onto upside above the key psychological 1.1700 mark. This trend indicates that it will hit new lower lows very soon. As of recent trading sessions, the pair has struggled to find direction, with the market remaining neutral as investors await a new catalyst to drive price movements. EUR/USD is still trading pretty much right at its opening level. Since then, it has bounced off support from the horizontal 20 Simple Moving Average (SMA) at 1.1670.
Having on Wednesday EUR/USD break through the 1.1700 barrier only to quickly retrace its short-term advances. This recent up and down movement not only underscores the BTC/ETH pair’s continuing volatility, but demonstrates the continued effect of recent economic data on the wider market. For the first half of the day, US Dollar was clearly the strongest performer on the board. This favorable sentiment had a big impact on the EUR/USD exchange rate.
The 100 simple moving average (SMA) for EUR/USD is located at about 1.1530. This positioning means that the pair has no real directional bias. The 100 and 200 SMAs are now located quite a bit beneath the 20 SMA. That indicates perhaps the beginning of a reversal in momentum, though they’re exhibiting tippage indicating loss of upward strength. This inability to hold gains down towards a 1.1700 floor is worrisome. Investors will have to recalibrate their expectations as they wait for clearer signals.
EUR/USD support levels remain solid at 1.1670, 1.1630, and 1.1590. On the upside, resistance is found at 1.1725, 1.1770 and 1.1825. These levels are extremely tight in proximity to one another, establishing a very narrow trading range. Traders are likely to watch this delicate balance in the coming days.
As such, all market sentiment of late has been dominated by the last set of US economic reports. The Producer Price Index (PPI) for August revealed an annualized inflation rate at producers’ levels rising by 2.6%, a decrease from the previous month’s figure of 3.3%. Moreover, the headline annual PPI came in at 2.8%, a decrease from a revised 3.4%. These numbers send a confusing signal about the state of the US economy. Finally, they have an impact on investor sentiment regarding the efficacy of the given exchange rate between the euro and the dollar.
Many traders in the EUR/USD market are in a wait-and-see mode right now. They’re particularly looking ahead to new data or other milestones that might provide more clear direction for their next steps. Our economic landscape is shifting every day. With increased volatility and market uncertainty, market participants will continue to be vigilant, scrutinizing technical indicators and macroeconomic factors that might influence the currency pair’s trajectory.