EURUSD: Weekly Chart Analysis
Hi Traders!
the euro dipped 0.2% against the dollar to $1.1050, It has fallen 1.3% this week, on track for its largest weekly loss since April. The euro, however, rose 2.1% in the month of August, for its best monthly showing since November 2023, with the European Central Bank still on track to lower interest rates again next month.
The single currency fell to a more than one-week low on Thursday and ended down 0.4% after German inflation cooled more than expected, bolstering investors' expectations of ECB cuts.
The U.S. dollar gained on Friday after data showed a key inflation measure came in line with forecasts, while personal spending and income increased, supporting expectations the Federal Reserve will likely cut interest rates by a smaller 25 basis points next month, instead of 50 bps.
Some market participants had expected the larger cut next month on the notion that the Fed was behind the curve in terms of easing and should play catchup.
U.S. rate futures on Friday implied a 31% chance of a 50 basis-point rate cut next month, down from Thursday's 35% probability, LSEG calculations showed, with the market fully pricing at the September meeting the Fed's first easing in more than four years. Markets have also factored in about 100 bps of cuts by the end of 2024.
From a technical point of view, if we look at the weekly chart, our harmonic structure, after having worked correctly on the bullish side (see idea below), is giving some Trading opportunities also to the Harmonic Traders. That said, the technical areas to follow on the weekly chart are around 1.097 (support area) and 1.1274 (resistance area).
We wish you a wonderful week!
Thanks for watching.
the euro dipped 0.2% against the dollar to $1.1050, It has fallen 1.3% this week, on track for its largest weekly loss since April. The euro, however, rose 2.1% in the month of August, for its best monthly showing since November 2023, with the European Central Bank still on track to lower interest rates again next month.
The single currency fell to a more than one-week low on Thursday and ended down 0.4% after German inflation cooled more than expected, bolstering investors' expectations of ECB cuts.
The U.S. dollar gained on Friday after data showed a key inflation measure came in line with forecasts, while personal spending and income increased, supporting expectations the Federal Reserve will likely cut interest rates by a smaller 25 basis points next month, instead of 50 bps.
Some market participants had expected the larger cut next month on the notion that the Fed was behind the curve in terms of easing and should play catchup.
U.S. rate futures on Friday implied a 31% chance of a 50 basis-point rate cut next month, down from Thursday's 35% probability, LSEG calculations showed, with the market fully pricing at the September meeting the Fed's first easing in more than four years. Markets have also factored in about 100 bps of cuts by the end of 2024.
From a technical point of view, if we look at the weekly chart, our harmonic structure, after having worked correctly on the bullish side (see idea below), is giving some Trading opportunities also to the Harmonic Traders. That said, the technical areas to follow on the weekly chart are around 1.097 (support area) and 1.1274 (resistance area).
We wish you a wonderful week!
Thanks for watching.
Nota
The euro is likely to remain little moved by Germany's state elections even after Alternative for Germany's victory in Thuringia marked the first time a far-right party has won a regional election since World War II, Commerzbank says. The European Central provides the backstop that prevents a critical escalation in the sovereign bond market, Commerzbank currency analyst Ulrich Leuchtmann says in a note. "As long as the currency market believes that this will not change even when EU-critical parties get stronger, it has no reason to reevaluate the euro due to some election results," he says. EUR/USD rises 0.2% to 1.1071.
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