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EUR/USD Price Forecast: Euro’s Upside Could Be Short-Lived

EUR/USD Price Forecast: Euro’s Upside Could Be Short-Lived. EUR/USD price forecast and analysis, including factors affecting the euro’s recent uptick and the potential influence of ECB speakers.

Factors Influencing EUR/USD Uptick

The European Union’s shared currency, the euro, is experiencing a slight uptick in value this Monday morning, following last week’s surge in the US dollar driven by the Non-Farm Payroll (NFP) report. However, the low trading volumes today are anticipated due to Labor Day celebrations in the US and Canada. Despite the holiday mood, there are several events on the horizon that could significantly impact the euro’s performance throughout the day.

One of the early signals casting a shadow on the euro’s outlook is the German balance of trade data, which has revealed a deceleration in exports. This slowdown has raised concerns about financial growth in the Eurozone’s largest economy and resulted in a decrease in the balance of trade numbers to €15.9 billion.

ECB Speakers and Their Influence

Today, the spotlight is on central bank speakers, particularly those from the European Central Bank (ECB). President Christine Lagarde is among the scheduled speakers. Over the weekend, ECB’s Wunsch reaffirmed a hawkish stance. Market participants await today’s speeches. The ECB faces a critical September meeting as the Eurozone’s economy slows. Market pricing suggests a 76% chance of a rate hike pause.

The EUR/USD currency pair is trapped between the 50-week moving average and the 200-week moving average. Additionally, the previous week’s candle closed with a long upper wick, which traditionally signals the potential for subsequent downside movement. This could coincide with a weekly close below the 50-week moving average.

The bearish sentiment prevails as traders closely monitor EUR/USD below the psychologically significant level of 1.0800 and the 1.0767 swing low.

Key Resistance Levels:

  • 1.0834
  • 200-day moving average
  • 1.0800

Key Support Levels:

  • 1.0767
  • 1.0700

IG CLIENT SENTIMENT DATA: MIXED

There is no clear consensus among traders regarding EUR/USD. Approximately 71% of traders are holding long positions at the time of writing.

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