EURUSD on Friday dropped -0.01% to 1.11617. Week ending 2024-09-20 rose 0.66%. What’s going on.

Dear ,

As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.01%	-1.5 Pips
Week 2024-09-20	0.66%	73.3 Pips
September	0.73%	81.3 Pips

Upcoming key events for the new week (London Time)

  Thu 01:30 PM Initial Unemployment Insurance Claims
  Thu 01:30 PM GDP annual rate
  Thu 02:20 PM Federal Reserve Chair Jerome Powell speech
  Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)

What happened over the week

In the Euro Area, consumer confidence improved slightly, with the Consumer Confidence Indicator rising to -12.9 points in September from -13.5 points in August according to DG ECFIN. However, inflation metrics showed stagnation and minimal growth, with the Core Harmonized Index of Consumer Prices (HICP) remaining steady at 0.3% monthly and 2.8% yearly in August per Eurostat. The Harmonized Index of Consumer Prices (1-month) saw a marginal decrease to 0.1% in August from 0.2% in July. The sentiment regarding economic outlook weakened significantly, with the ZEW Survey Economic Sentiment dropping to 9.3 points in September from 17.9 in August, as reported by ZEW.

In Germany, the Producer Price Index (PPI) for August displayed no change, remaining at -0.8% annually and 0.2% monthly compared to July, according to the Federal Statistical Office (Destatis). German economic sentiment also took a hit; the ZEW Indicator of Economic Sentiment fell drastically to 3.6 points in September from 19.2 in August, and the ZEW Survey for the Economic Situation further deteriorated to -84.5 points in September from -77.3 points in August.

In the United States, several economic indicators showed improvement. The Manufacturing Business Outlook Survey for September rose significantly to 1.7 points from -7 points in August, per the Philadelphia Fed. Initial Unemployment Insurance Claims for the week ending September 14 declined to 219K from the revised figure of 231K, based on data from the Department of Labor. Housing market indicators were positive, with Building Permits increasing to 1.475 million in August from a revised 1.406 million in July, and Housing Starts also rose to 1.356 million from 1.237 million, according to the Census Bureau. However, the Federal Reserve lowered its interest rate projections and the Federal Funds Rate fell to 5% from 5.5%, with the new interest rate projection at 4.4% compared to the previous rate of 5.1%.

The developments reported have mixed implications for the EURUSD currency pair. The slight improvement in Euro Area consumer confidence could support the Euro marginally; however, stagnant inflation and declining economic sentiment are likely to exert downward pressure. Meanwhile, the relatively strong U.S. economic data—such as improved business outlook, lower unemployment claims, and robust housing market indicators—could bolster the USD. Yet, the Fed’s decision to lower interest rates might weaken the USD’s support. Overall, based on the mixed signals from both economies, EURUSD may experience volatility but remain in a relatively stable range until more definitive economic data is released. Upcoming high-impact events like the U.S. GDP annual rate and Federal Reserve Chair Jerome Powell’s speech are likely to be key drivers for any significant movements in the pair.

What can we expect from EURUSD for the new week and what happened on Friday?

EURUSD on Friday dropped -0.01% to 1.11617. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-09-20, the pair rose 0.66% or 73.3 pips higher.

Looking ahead on Monday, EURUSD looks mixed as the pair is likely to consolidate above week low of 1.10705.

As for the new week, our technical outlook looks bullish, immediate upside resistance level at 1.12056 (WR1) with break above could target 1.12494 (WR2). On the downside, we are looking at week low of 1.10705 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.11819 would suggest bullish bias after recent positive movement.

For the month of September, EURUSD is up by 0.73% or 81.3 pips higher.

Weekly key levels to watch out: