You are here: Home > articles > Forex > Overview of the EUR/USD pair. August 10th. Should we expect a significant impact from US inflation?
Overview of the EUR/USD pair. August 10th. Should we expect a significant impact from US inflation?
August 10, 2023 9:25 amVideo
Latest News
- Euro will return to parity April 12, 2024
- Trading Signals for ETH/USD (Ethereum) for April 12-15, 2024: buy above $3,435 (3/8 Murray – 200 EMA) April 12, 2024
- EUR/USD. Analysis for April 12th. The euro falls down under the pressure of the news background April 12, 2024
- GBP/USD. Analysis for April 12th. A significant event: the pound fell below the 25-figure April 12, 2024
- Trading Signals for EUR/USD for April 12-15, 2024: buy above 1.0620 (-2/8 Murray – rebound) April 12, 2024
- GBP/USD: trading plan for the US session on April 12th (analysis of morning deals). The pound followed the euro April 12, 2024
- EUR/USD: trading plan for the US session on April 12th (analysis of morning deals). The euro continues to fall April 12, 2024
- EUR/USD and GBP/USD: Technical analysis on April 12 April 12, 2024
- EUR/USD: Dovish signals from the ECB and rising PPI April 12, 2024
- EUR/USD. April 12th. ECB meeting: confidence in rate cut increased in June April 12, 2024
- GBP/USD. April 12th. British economy continues to stagnate April 12, 2024
- Analysis and trading tips for EUR/USD on April 12 (US session) April 12, 2024
- Analysis and trading tips for USD/JPY on April 12 (US session) April 12, 2024
- Analysis and trading tips for GBP/USD on April 12 (US session) April 12, 2024
- Weekly Forex Outlook: 12/04/2024 – More inflation data on the way as rate cut bets in disarray April 12, 2024
- Technical Analysis – GBPUSD ticks down to new 5-month low April 12, 2024
- Bitcoin holds above $70,000 as halving event looms – Crypto News April 12, 2024
- Week Ahead – More inflation data on the way as rate cut bets thrown into disarray April 12, 2024
- Bitcoin will thrive during supply crisis April 12, 2024
- Technical Analysis – EURUSD plummets after US CPI and ECB decision April 12, 2024
On Wednesday, the EUR/USD currency pair returned to the moving average line again, and the entire movement in recent weeks strongly resembles a flat trend. We have discussed the same in other articles where we analyze minor timeframes. A flat or sideways trend is easily observable, but it is hard to predict how long it will continue. Everything will depend on the macroeconomic and fundamental background, even though it has not been a primary focus for market participants lately. It’s worth noting that the European currency and the pound have been appreciating for 11 months. Undoubtedly, it’s not a continuous movement in one direction. Nevertheless, we don’t see reasons for such strong growth.
Hence, the main strategy remains unchanged for now. The pair is expected to continue its decline in the medium term. Of course, as we observe now, there may be periods of bullish corrections or a flat trend. However, with each passing week, the euro has fewer and fewer purely hypothetical reasons to rise. As the market is flat, there’s little more to add. The moving average line may be breached often, and the 24-hour timeframe remains the same. The decline should continue at least to the Senkou Span B line, which lies at 1.0863.
US inflation will influence the Federal Reserve’s rate decision.
Today can rightly be called the most important day of the week. Not because there will be significant and abundant macroeconomic data but simply because there’s data at all. The US inflation report is one of the most crucial for the market. The consumer price index will rise to 3.3% y/y in July. This is not alarming, as even macroeconomic indicators with a certain trend must undergo corrections. Therefore, an inflation increase of 3.3% doesn’t mean it has stopped slowing down.
However, this could act as a “red flag” for the Federal Reserve. The Fed has repeatedly indicated its intention to combat inflation as soon as possible and has no plans to prolong this over several years. Thus, if US inflation rises today, we can expect the US dollar to strengthen. However, it may not rise as sharply as predicted, resulting in modest growth for the US currency. Whether this modest growth is enough to exit the sideways trend and end the flat movement is a big question. We doubt that the flat trend will end today. An inflation increase above 3% or a new slowdown could provoke a stronger movement in the pair.
The average volatility of the euro/dollar currency pair over the last five trading days as of August 10th is 67 points, characterized as “medium.” Therefore, we anticipate the pair’s movement between the levels of 1.0913 and 1.1047 on Thursday. A downward reversal of the Heiken Ashi indicator will indicate a possible resumption of the downward movement.
Support Levels:
S1 – 1.0925
S2 – 1.0864
S3 – 1.0803
Resistance Levels:
R1 – 1.0986
R2 – 1.1047
R3 – 1.1169
Trading Recommendations:
The EUR/USD pair has begun an upward correction, smoothly transitioning into a flat trend. Currently, long positions can be considered with targets of 1.1047 and 1.1108 if the price consolidates above the moving average. Short positions can be taken in the case of a reversal of the Heiken Ashi indicator downwards or a rebound from the moving average, with targets of 1.0925 and 1.0913.
Explanations of the Illustrations:
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: