The EUR/USD pair is currently positioned near the 1.1650 mark, exhibiting a degree of stability following the volatile fluctuations observed on Tuesday. The pair declined to a new one-week low of 1.1608 during the early European session, subsequently rebounding. Financial markets exhibit a degree of caution in light of the upheaval in global government bonds, particularly following the unprecedented yields observed in the United Kingdom long-term gilts on Tuesday.
In terms of economic indicators, the Eurozone released the July Producer Price Index (PPI), which increased at an annualized rate of 0.4%. This figure surpassed the expected 0.2%, although it remains below the 0.8% recorded in June. The Hamburg Commercial Bank (HCOB) has published the final estimate for the August Composite and Services Purchasing Managers’ Indexes (PMI). The EU services PMI has been adjusted downward to 51, a revision from the initial estimate of 51.1. The Composite PMI was confirmed at 50.5, a revision down from the previously calculated 50.7.
In the United States, the latest data on MBA Mortgage Applications indicates a decrease of 1.2%, following a prior decline of 0.5%. The American session is set to release the July Factory Orders and the July JOLTS Job Openings report. Aside from that, several officials from the Federal Reserve will be making statements.
The United States is set to unveil a series of employment-related statistics in anticipation of the Nonfarm Payrolls report due on Friday. The ADP Employment Change report is scheduled for release on Thursday, having been postponed due to the Labor Day holiday observed on Monday.
Short-term technical outlook for EUR/USD
From a technical perspective, the EUR/USD pair remains susceptible to a decline. The daily chart indicates that it remains within a constrained range, with the upward movement being restricted by a flat 20 Simple Moving Average (SMA) near 1.1665. The same chart illustrates that technical indicators remain stagnant around their midlines, whereas the 100 and 200 SMAs continue their upward trajectory, significantly below the current level.
In the short term, as indicated by the 4-hour chart, EUR/USD remains firmly within the bounds of non-directional moving averages. The 200 SMA offers a level of support near the daily low, whereas the 100 SMA is positioned approximately at 1.6065. Aside from that, technical indicators are positioned within negative territory, exhibiting slight downward trends, insufficient to validate an impending decline but indicative of the prevailing market sentiment.
Support levels: 1.1620, 1.1590, 1.1550
Resistance levels: 1.1665, 1.1700, 1.1745