- The euro rebounded from recent lows, rising above 1.1750, which is a positive sign on daily charts.
- Attention is now on upcoming speeches from Federal Reserve officials for insights into the bank’s monetary policy.
- Federal Reserve Chairman Jerome Powell is scheduled to address the public on Tuesday, potentially influencing the short-term direction of the USD.
On Monday, the EUR/USD pair caught some buying interest, halting a three-day upward streak. Currently, it’s trading at 1.1765, after bouncing back from a low of 1.1730. However, enthusiasm remains somewhat weak as the US dollar continues its short-term strength ahead of several Federal Reserve speeches today.
This week, Fed members will hold a press conference discussing their views on the central bank’s strategy. Investors are particularly keen to hear from new Federal Reserve Committee member Stephen Miran, who is expected to address his independent stance as a policymaker and explain his reasoning behind a recent interest rate cut, which has left some in the committee at odds with him.
In his Tuesday speech at the Providence Chamber of Commerce, Powell may explore the need for a careful approach to monetary policy. Last week’s comments from him contrasted the prevailing market expectations, which anticipate a rate reduction at almost every monetary policy meeting this year.
Across the Atlantic, both Philip Lane, the chief economist of the European Central Bank (ECB), and Joachim Nagel, the president of the German Bundesbank, might share valuable insights on the ECB’s policy direction. Additionally, consumer confidence data from the eurozone will be crucial. However, the focus remains on the Purchasing Managers’ Index (PMI) for services and manufacturing on Tuesday, with hopes of gaining a clearer picture of the region’s economic health.
Daily Digest Market Mover: The US Dollar Maintains Upward Trajectory
- The US Dollar (USD) has continued to rise against many currencies in the quiet Asian markets on Monday, with a lack of supportive economic data in Europe for the Euro (EUR). Therefore, a cautious market outlook is expected to temper any upward movement for the euro.
- Fitch Ratings recently upgraded Italy’s credit rating to BBB+, marking the first increase in four years.
- While Monday’s economic calendar lacks significant releases, a collection of speeches from Federal Reserve officials could offer insight into the US dollar’s trajectory. Key attention will be on the new appointee by President Trump and several other regional presidents speaking later this week.
- Over the weekend, ECB officials confirmed that the bank’s current monetary policy is in a good place, indicating no immediate need for further interest rate cuts. These remarks seem to counter Mario Centeno’s earlier comments hinting at possible rate reductions.
Technical Analysis: EUR/USD Approaching Trendline Support at 1.1725
The EUR/USD pair is undergoing a lower correction after its recent peak at 1.1918. Key technical indicators show a bearish trend, although the relative strength index (RSI) remains above oversold territory, suggesting some potential for a further downward movement.
Nonetheless, the pair is nearing trendline support established since late August, which could offer some stability. A target zone below is set near 1.1700, with the low from September 11 being watched closely at around 1.1660. In contrast, the recent high of 1.1795 is noted as an initial resistance before reaching the September 18 high around 1.1850.
