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Euro Currency Looks to Gain against the Dollar


The euro currency spiked high on Friday against the U.S. dollar. However, this gain could be corrective for the EUR/USD Forex market. The twenty day simple moving average looks a bit bearish in slope and the 100 and 200 daily simple moving averages are flat.

Today’s economic calendar has some market movers for the euro currency. The European Union and Germany, their largest economy, will release monthly consumer price (CPI) index numbers and the euro area will release monthly business and consumer sentiment indices.

The Dallas Federal Reserve will release their monthly manufacturing index and the U.S. is publishing monthly pending home sales numbers. The United Kingdom has no data scheduled for release.

On Friday, Federal Reserve Chair Jerome Powell spoke at the annual Jackson Hole symposium. He said that, in July, there was a good case to be made for tapering monthly asset purchases. However slack remains in the labor market and inflation remains transitory.

There are already signs that consumer prices might have peaked. This week’s monthly non-farm payroll (NFP) report will be key for euro and dollar traders. The U.S. will also publish their unemployment rate, average hourly earnings and their labor participation rate. All scheduled for Friday.

Daily Euro Currency Technical Analysis (EUR/USD)

Looking at price action on the above EUR/USD MT 4 chart, this currency exchange rate climbed one hundred pips from a new yearly low price point at 1.1663. Price action is now around the 23.6 percent Fibonacci level at 1.1805 as we head into Monday.

The technical indicators have inched higher but remain bearish near multi-week lows. The EUR/USD Forex market is struggling to gain traction above the 20 day simple moving average. A daily close above 1.1805 opens the door to challenge the 38.2 percent Fibonacci level lining up near 1.1890. 

Immediate technical support lines up at the yearly low price point of 1.1663 with the downside barrier at 1.1540 coming into play next. The next layer of support lines up at 1.1470.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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