EURUSD on Wednesday dropped -0.54% to 1.11310. What we know.

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	-0.54%	-60.9 Pips
Week to-date	-0.27%	-29.8 Pips
September	0.46%	50.6 Pips

Upcoming key events (London Time)

  Thu 01:30 PM USD GDP annual rate
  Thu 02:20 PM USD Federal Reserve Chair Jerome Powell speech
  Thu 02:30 PM EUR European Central Bank’s President Christine Lagarde speech
  Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, new-home sales experienced a notable decline of -4.7% in August after a significant rise of 10.6% in July. This suggests a slowdown in the housing market following a strong previous month. On a slightly positive note, the U.S. House Price Index for July showed a slight improvement, rising to 0.1% from a decline of -0.1% in June, according to data provided by the Federal Housing Finance Agency (FHFA). These mixed indicators reflect a fragmented housing market where sales are cooling down, but prices are showing some stability.

In Germany, the ifo Business Climate Index for September fell to 85.4 points, down from 86.6 points in August, as reported by the ifo Institute. This indicates a decline in business sentiment within Germany, reflecting growing economic uncertainties and a potentially slowing domestic economy. The drop in the index could be attributed to various challenges facing the German economy, including supply chain disruptions, energy prices, and geopolitical tensions affecting business confidence.

The recent economic data from both the U.S. and Germany could have a mixed impact on the EURUSD currency pair. The decline in U.S. new-home sales might suggest a weakening U.S. economy, which could weaken the U.S. Dollar. However, the mildly positive house price index counterbalances this somewhat. On the other hand, the sharp drop in Germany’s business climate index points to economic difficulties in the Eurozone’s largest economy, which could weigh on the Euro. The EURUSD pair dropped by -0.54% to 1.11310 on Wednesday, reflecting these uncertainties.

Further volatility is expected in the EURUSD pair with upcoming high-impact events, including the U.S. GDP annual rate and speeches by Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde. These events could result in significant market movements depending on the economic outlook and monetary policy hints provided by these key figures. Additionally, the U.S. PCE Price Index report on Friday will be widely watched for inflation trends, potentially influencing Federal Reserve decisions and further impacting the EURUSD exchange rate.

What can we expect from EURUSD today?

EURUSD on Wednesday dropped -0.54% to 1.11310. Price is below 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 1.10967 with break below could see further selling pressure towards S2 at 1.10623. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.12140 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.11210 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: