EUR/USD posts modest gains around 1.0725 amid the weaker USD

  • EUR/USD posts a modest gain around 1.0725 amid the weakening US Dollar.
  • US Treasury Secretary Janet Yellen said that the US can manage inflation without hurting the employment market.
  • The market anticipates the European Central Bank (ECB) will maintain interest rates unchanged at its policy meeting on Thursday.
  • Market players await the US Consumer Price Index (CPI), ECB interest rate policy meeting.


The EUR/USD pair recovers some lost ground around 1.0725 after bouncing off the low of 1.0697. The rebound of the major pair is bolstered by the downward pressure on the US Dollar. Meanwhile, the US Dollar Index (DXY) corrects Lower to 104.70.

US Treasury Secretary Janet Yellen said on Sunday that she is becoming more convinced that the US will be able to curb inflation without causing major impacts on the labor market. She added that every gauge of inflation is erasing and there was no massive wave of layoffs.

The upbeat US economic data last week lends support to the higher for longer interest rate narrative in the US. The markets have been priced in the possibility of a 93% chance of a rate hold at the September meeting and a 43.5% chance of a rate hike at the November meeting, according to the CME FedWatch Tool. This, in turn, might lift the US Dollar (USD) and cap the upside of the EUR/USD.

The Fed Governor Christopher Waller said that the Fed has extra room to raise interest rates, but the data will determine it. While, Fed Boston President Susan Collins pointed out the risk of an inappropriately restrictive monetary policy stance and called for a patient and careful, but deliberate policy. Chicago Fed President Austan Goolsbee outlined the central bank's goal of leading the economy into a "golden path." This route represents a scenario in which inflation falls without causing a recession.

On the Euro front, analysts believe the European Central Bank (ECB) will maintain interest rates unchanged at its next policy meeting on Thursday. Destatis data released on Friday indicated that the German Harmonised Consumer Price Index (HICP) for August came in at 6.4% YoY, as expected by the market, while the core CPI remained steady at 6.1%. Furthermore, Eurozone GDP increased by 0.1% in the second quarter (Q2), compared to 0.3% in the previous quarter and 0.3% estimated.

On Wednesday, investors will closely watch the release of the US Consumer Price Index (CPI) for August. The monthly figure is anticipated to increase by 0.5%, while the monthly core figure is anticipated to remain unchanged at 0.2%. On Thursday, the focus will shift to the ECB's monetary policy. The event could provide the EUR/USD pair with a clear direction.

 

EUR/USD

OVERVIEW
Today last price1.0721
Today Daily Change0.0020
Today Daily Change %0.19
Today daily open1.0701
 
TRENDS
Daily SMA201.0827
Daily SMA501.095
Daily SMA1001.091
Daily SMA2001.0823
 


LEVELS
Previous Daily High1.0744
Previous Daily Low1.0694
Previous Weekly High1.0809
Previous Weekly Low1.0686
Previous Monthly High1.1065
Previous Monthly Low1.0766
Daily Fibonacci 38.2%1.0725
Daily Fibonacci 61.8%1.0713
Daily Pivot Point S11.0682
Daily Pivot Point S21.0663
Daily Pivot Point S31.0632
Daily Pivot Point R11.0732
Daily Pivot Point R21.0763
Daily Pivot Point R31.0781