The Euro (EUR) commenced Thursday’s North American trading session mirroring its previous day’s closing value, exhibiting resilience after briefly breaching the 1.1300 threshold. According to Shaun Osborne, Chief FX Strategist at Scotiabank, the currency is finding some degree of stability amidst prevailing market conditions.
EUR/USD’s Bullish Trajectory Persists
With a sparse economic data calendar for the Eurozone, and many major European nations observing Labour Day, the EUR is expected to be primarily influenced by broader market dynamics leading up to Friday’s preliminary Consumer Price Index (CPI) announcement. Market participants will be closely watching this data for indications of inflationary pressures within the Eurozone, which could influence the European Central Bank’s (ECB) monetary policy decisions. Furthermore, the ECB is scheduled to release its economic bulletin on Friday, potentially providing insightful analysis on the global trade landscape and the potential ramifications of escalating tariffs. This bulletin will be scrutinized for any signals regarding the ECB’s assessment of global economic risks and its implications for the Eurozone’s growth outlook. The ECB’s current monetary policy stance remains accommodative, but any hints of a shift towards tightening could significantly impact the EUR/USD exchange rate.
Despite a period of consolidation around the 1.14 level over the past couple of weeks, the overall trend for EUR/USD remains bullish. Technical indicators, such as the Relative Strength Index (RSI), support this outlook, although the RSI’s recent dip below 60 suggests a potential moderation in upward momentum. Key support levels are identified around the 1.1350 congestion area, providing a buffer below the 1.1300 mark. Conversely, resistance is anticipated above the 1.1500 level, which could present a challenge for further upward movement. Traders will be closely monitoring these levels for potential breakout or breakdown signals, which could dictate the short-term direction of the EUR/USD pair. Furthermore, any unexpected news or data releases could trigger volatility and override these technical considerations.
