Forex

EURUSD Faces Resistance At Key Level, Focus Shifts to US Jobs Data

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Written By: Michael Abadha
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    Summary:
  • EURUSD is struggling to break above 1.0950 despite the impending Fed rate cuts, and US Initial Jobless Claims could raise stakes.

EURUSD returned to the upside on Thursday as markets signaled signs of stability after recent volatility. The currency pair traded at 1.0931, having inched up by 0.1 percent as of 09.40 am UTC. It got rejected at 1.1000 on Monday, but seems to have found support above the 1.0900 psychological mark. Therefore, the bulls will be keen to keep the exchange rate above that mark heading into the weekend. That could create a positive sentiment around the euro as markets wait to absorb the implications of potential three rate cuts starting from September.

Later in the day, traders will have their eyes on US Initial Jobless Claims figures for fresh volatility. Also, Federal Open Market Committee (FOMC) member Tom Barkin is scheduled to speak during the New York session.  However, the market will likely ignore his comments to a large extent, with September rate cut prized in.

Momentum indicators

EURUSD has a neutral-to-bearish-leaning momentum on the 2-hour chart. The 50-SMA is about to cross above the 20-EMA, signaling that the sellers are gaining ground. Also, the current price is below both SMAs, lending support to the bearish view. Notably, the pair broke out downwards at the 1.0950 psychological mark. Therefore, a return to that level could be key to building a sustainable upside momentum. Meanwhile, the Relative Strength Index (RSI) is below average at 48, adding to the downside view.

EURUSD support and resistance levels

The RSI suggests that the downside will likely prevail if EURUSD faces resistance at the 1.0935 pivot mark. That could see the establishment of the first support at 1.0918. However, if the sellers extend their control, they could breach that mark and take the pair lower to test 1.0900. Alternatively, a move above 1.0935 will favour the buyers to take control, with the next resistance likely to be at 1.0950. Further bullish control at that point will break past that barrier and invalidate the downside narrative. Also, it could strengthen the upside movement to test 1.0962.

This post was last modified on Aug 08, 2024, 11:47 BST 11:47

Written By: Michael Abadha

Michael is a self-taught financial markets analyst, who specializes in analysis of equities, forex and crypto markets. He draws his inspiration from the fact that markets provide an interface through which the world interacts in search of a better tomorrow.

Published by
Written By: Michael Abadha