The EUR/USD pair is trading sideways below the key 1.1600 resistance, starting the week in a quiet, consolidative mode after Friday’s strong rally. The US Dollar remains under pressure following disappointing US job data, while Eurozone indicators and central bank speculation continue to influence sentiment.
EUR/USD Technical Analysis: Resistance at 1.1600 Holds Firm
EUR/USD currently trades near 1.1556, holding close to recent highs but unable to break the 1.1600 psychological barrier. On the daily chart, the pair found strong support near the 100-day Simple Moving Average (SMA) around 1.1370. The 20-day SMA is now flat near 1.1640 — the next key resistance. A daily close above this level would confirm renewed bullish momentum.
Technical indicators have recovered from oversold levels but lack upward strength, suggesting that bullish momentum is still fragile. On the 4-hour chart, EUR/USD remains range-bound, with the 20 SMA flattening around 1.1480. The pair continues to test the 1.1600 level in Asia, and a breakout could trigger the next upside leg.
Key Support Levels: 1.1545, 1.1505, 1.1470
Key Resistance Levels: 1.1600, 1.1640, 1.1685
Fundamental Outlook: Fed Rate Cut Hopes Support Euro
Last Friday’s US Non-Farm Payrolls report showed just 73K jobs were added in July, far below expectations. Additionally, significant downward revisions to May and June fueled speculation that the US labor market is weakening — raising the probability of a Federal Reserve rate cut in September.
Despite the Fed’s recent hawkish tone, investors are now pricing in a 25 basis point rate cut next month, with softer inflation and labor data supporting that view. Meanwhile, concerns over President Trump’s trade tariffs continue to weigh on US economic outlook and the dollar.
Eurozone Sentiment Dips, Data Ahead in Focus
Eurozone data released Monday showed the Sentix Investor Confidence Index fell to -3.7 in August from 4.5 in July, reflecting investor caution. Still, the euro remains firm due to broader dollar weakness.
Looking ahead, markets will watch for upcoming Eurozone PMI releases and US Factory Orders data. A weaker-than-expected reading from the US could reinforce rate cut expectations and help EUR/USD break above 1.1600.
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