EUR/USD Price Prediction:
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read more: USD/JPY, EUR/JPY Update: Pause Before Continue Bullish?
EUR/USD showed a remarkable rise early in the US session, but the dollar’s strength has since rebounded, and at the time of writing, it has once again abandoned the 1.0900 handle and traded at 1.0872.
US data
US data this afternoon showed initial jobless claims fell by just 11,000 to 239,000 after last week’s revision of 250,000. The Philadelphia manufacturing outlook was weaker than expected after yesterday’s good retail sales data, but that didn’t stop the dollar from falling. Significant improvements in general activity, new orders and shipments are positive for the first time since May 2022. However, expectations for the next six months were somewhat disappointing as most of the future indicators fell. It was a rare positive result in the fight against inflation as companies expected lower price gains compared to the previous quarter.
The positive shift in sentiment seems to have faded as the dollar rebounded sharply while risk assets languished as the US trade lengthened. The EURUSD remained slightly positive for the day, but the constant shift in sentiment continues to provide modest support for the USD whenever the EUR looks poised for a rally.
Meanwhile, DXY continues to break below the long-term downtrend line, which will be a key takeaway heading into next weekend’s Jackson Hole Symposium. Can the Fed pull the market out of the August slump with a surprise at Jackson Hole that didn’t disappoint last year?
Dollar Index (DXY) Daily chart – August 17, 2023
Source: TradingView
upcoming risk events
From a risk event perspective, there isn’t much going on for the US over the next week or so leading up to the Jackson Hole Symposium. Some of the mid-size data early next week will be the highlight, and the focus will shift to the Eurozone instead.
Final euro zone inflation figures are released tomorrow, but volatility could increase if there is a significant change from preliminary figures. However, if print comes in as expected, EURUSD could be swayed by overall sentiment heading into next week.
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Technical outlook and final thoughts
Looking at EURUSD from a technical standpoint, today’s rally failed to break the swing highs of the last 4 hours as the EURUSD continues to make lower highs and lower lows.
Looking at the daily timeframe, the 100-day moving average is likely to act as a key resistance area on the chart below, likely to face another challenge, and three consecutive days of recovery attempts. is under selling pressure. In the form of a 50-day moving average at the 1.0974 handle.
Looking at the RSI (14), we see it approaching the oversold territory, likely to see some form of buying pressure, and further legs to the downside. The immediate downside support is at the 1.0840 handle before the 200-day moving average becomes a focal point near the 1.0787 handle.
EUR/USD Daily chart – August 17, 2023
Source: TradingView
IG client sentiment data
According to IGCS, individual traders are currently net long in EURUSD, with 59% of traders currently holding LONG positions.
To get the full IG client sentiment breakdown and tips, download the guide below
|
change |
long |
shorts |
OI |
| every day | 3% | -6% | -1% |
| every week | 18% | -twenty one% | -1% |
Written by: Zain Vawda, Market Writer DailyFX.com
Contact and follow Zain on Twitter: @zvawda
