The EUR/USD pair is trading near 1.1150, maintaining an upward trend during the Asian session on Thursday. This movement is primarily influenced by a weaker US Dollar (USD) amidst dovish expectations from the Federal Reserve (Fed). Traders are closely monitoring upcoming speeches by Fed officials, including Chair Jerome Powell, which are expected to provide further direction for the pair.
Key Takeaways
- EUR/USD Gains: The pair is showing strength around 1.1140 during Thursday’s Asian session, driven by a softer USD.
- Fed’s Dovish Stance: Market participants are anticipating dovish remarks from Fed officials, potentially leading to further rate cuts.
- ECB Rate Cuts Expected: HSBC analysts forecast that the European Central Bank (ECB) will implement rate cuts at each meeting from October through April 2025.
Technical Analysis
H4 Chart Overview
The EUR/USD has exhibited a bullish structure, with key levels indicating potential resistance and support areas:
- Highs and Lows: The pair recently made a Higher High (HH), followed by a Break of Structure (BOS), signaling the possibility of continued upward momentum.
- Key Resistance: The price is approaching a resistance zone near the 1.1150-1.1180 area, which aligns with previous BOS and HH zones.
- Support Levels: On the downside, support is seen around 1.1120 and 1.1060, with the latter aligning with a potential demand zone.
H1 Chart Overview
- Market Structure: The 1-hour chart shows a Change of Character (ChoCH) from bearish to bullish, reinforcing the short-term upward trend.
- Equilibrium: The price is currently at an equilibrium point around 1.1140, indicating a potential balance between buyers and sellers.
- Possible Retracements: Should the price pull back, look for support around the 1.1120 level, which may offer buying opportunities if bullish pressure resumes.
Economic Data
Traders should remain vigilant as multiple high-impact economic releases are scheduled:
- US Initial Jobless Claims: A significant indicator of labor market health, which could influence Fed policy.
- Durable Goods Orders: A crucial measure of manufacturing sector activity in the US.
- US Q2 GDP: Finalized annualized GDP figures could sway market sentiment depending on any deviations from expectations.
Trading Recommendation
Given the current market dynamics, traders might consider the following strategies:
- Bullish Scenario: If EUR/USD breaks above 1.1150, look for a continuation towards 1.1180. Entry could be considered around 1.1140-1.1150 with a stop below 1.1120.
- Bearish Scenario: A failure to hold above 1.1140 could see a retracement towards 1.1120 and possibly 1.1060. Short positions could be entertained on signs of bearish pressure at current levels.
Conclusion
The EUR/USD remains buoyant as traders await key economic data and Fedspeak. With technical indicators suggesting further upside potential, any dovish signals from the Fed could propel the pair higher. However, caution is advised, as market volatility is expected around these events.
