Dear ,
As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.
EURUSD Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | -0.1% | -11.3 Pips |  |
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| Week to-date | 0.25% | 27.5 Pips |  |
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| September | 0.32% | 35.5 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
Recent economic data from the United States indicate a shift in several key indicators. The Federal Reserve reported a decrease in interest rate projections for the first and second years, now at 3.4% and 2.9%, respectively, compared to previous rates of 4.1% and 3.1%. The interest rate projection for the longer term slightly increased to 2.9% from 2.8%. The Fed’s decision on the Federal Funds Rate came in below forecast at 5%, a drop from the prior rate of 5.5%. Building permits and housing starts both experienced an uptick in August, with permits rising to 1.475 million and housing starts increasing to 1.356 million. Industrial production showed a significant rebound, rising to 0.8% in August from -0.6% in July. However, retail trade indicators presented mixed results: the Retail Trade Control Group dropped to 0.3% from a revised 0.4%, and retail trade excluding automobiles declined to 0.1% from 0.4%. Sources for this data include the Federal Reserve and the Census Bureau.
In the Euro Area, the Core Harmonized Index of Consumer Prices (HICP) for August remained unchanged at 0.3%. The broader HICP (1-month) fell to 0.1% from 0.2% in July. On a yearly basis, the Core HICP remained stable at 2.8% year-on-year. Economic sentiment within the Euro Area showed a notable decline according to the ZEW Survey, which reported a drop to 9.3 points from 17.9 points in August. Similarly, Germany’s ZEW Indicator of Economic Sentiment fell sharply to 3.6 points from 19.2 points, and the Economic Situation indicator declined to -84.5 points from -77.3 points. These indicators suggest a deteriorating economic sentiment in the region. Sources for this data include Eurostat and the ZEW Institute.
The movements in EURUSD are influenced by the shifting economic landscape. The recent U.S. Federal Reserve data showing lower interest rate projections and a cut in the Federal Funds Rate suggest a more dovish monetary policy stance, which could put downward pressure on the US Dollar. In contrast, the relatively stable inflation data from the Euro Area paired with deteriorating economic sentiment presents a mixed outlook for the Euro. While weaker U.S. interest rates typically make the Dollar less attractive, the declining economic sentiment in the Euro Area might limit significant gains for the Euro. As a result, EURUSD experienced a minor drop of -0.1%, closing at 1.11159 on Wednesday. With no major events on the immediate horizon, the market may continue to react to these recent data releases while waiting for more concrete economic signals.
What can we expect from EURUSD today?
EURUSD on Wednesday dropped -0.1% to 1.11159. Price is above 9-Day EMA while Stochastic is falling.
Updated daily direction for EURUSD looks bearish as the pair posted lower in Wednesday trading session.
Looking ahead for the day, immediate support level is at S1 1.10786 with break below could see further selling pressure towards S2 at 1.10412. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.11891 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.10965 would indicate selling pressure.
For the week to-date, take note that EURUSD is mixed as compared to the prior week.
Key levels to watch out:
| R3 | 1.12638 |
| R2 | 1.12264 |
| R1 | 1.11712 |
| Daily Pivot | 1.11338 |
| S1 | 1.10786 |
| S2 | 1.10412 |
| S3 | 1.0986 |
