EUR/USD threatens 200-day SMA amid USD strength

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  • EUR/USD dived more than 0.50% towards 1.0810, near the 200-day SMA.
  • Hawkish remarks by Thomas Barkin and Susan Collins boosted the USD ahead of Powell’s speech on Friday.
  • ECB President Christine Lagarde will speak on Saturday.

On Thursday, the EUR/USD lost momentum and traded weak against the USD. Hawkish remarks made by Federal Reserve (Fed) officials gave the Greenback traction, while the European calendar had nothing relevant to offer. All eyes are now on Jerome Powell and Christine Lagarde's speeches on Friday and Saturday, respectively, for fresh impetus.

On the US side, the USD gathered momentum following Susan Collins' remarks indicating the potential for further rate hikes, and the market sentiment shifted, leading investors to anticipate a more aggressive approach by the Federal Reserve (Fed). This sentiment was reinforced by Thomas Barkin's statement that the Fed would keep rates unchanged for the remainder of 2023 and consider rate cuts in 2024. As a result, US yields experienced an uptick and allowed the USD to gain traction against its rivals.

Datawise, the US reported strong Jobless Claims from the second week of August, contributing to the rise of the US yields.

On the other hand, the European calendar had nothing relevant to offer on the data front, and the Euro recovered some ground against its rivals after trading weak on Wednesday. Investors' focus is set on Saturday’s speech by ECB's Christine Lagarde at the Jackson Hole Symposium, where they will look for further clues regarding forward guidance. As for now, World Interest Rates Probabilities (WIRP) suggest that markets continue to discount 25 basis points in September, October and December by the European Central Bank (ECB), which would take rates to 5%.

EUR/USD Levels to watch

From a technical perspective, EUR/USD retains a bearish outlook for the short term, as observed on the daily chart. The Relative Strength Index (RSI) is below its midline, in negative territory, and exhibits a southward slope. The negative signal from the Moving Average Convergence Divergence (MACD), indicated by red bars, reinforces the growing bearish momentum. 

Support levels: 1.0800 (200-day SMA), 1.0750, 1.0730.

Resistance levels: 1.0860, 1.0900, 1.0910-1.0930 (bearish convergence between the 20- and 100-day SMAs).

EUR/USD Daily chart

EUR/USD

Overview
Today last price 1.0813
Today Daily Change -0.0051
Today Daily Change % -0.47
Today daily open 1.0864
 
Trends
Daily SMA20 1.0939
Daily SMA50 1.0982
Daily SMA100 1.093
Daily SMA200 1.0799
 
Levels
Previous Daily High 1.0872
Previous Daily Low 1.0802
Previous Weekly High 1.096
Previous Weekly Low 1.0845
Previous Monthly High 1.1276
Previous Monthly Low 1.0834
Daily Fibonacci 38.2% 1.0845
Daily Fibonacci 61.8% 1.0829
Daily Pivot Point S1 1.0821
Daily Pivot Point S2 1.0777
Daily Pivot Point S3 1.0752
Daily Pivot Point R1 1.089
Daily Pivot Point R2 1.0915
Daily Pivot Point R3 1.0959

 

 

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