The Euro clings to daily gains vs. the US Dollar
The Euro (EUR) gains momentum against the US Dollar (USD), motivating bullish sentiment that pushes EUR/USD towards the vicinity of daily highs, reaching around 1.0680 as the new week begins. Although the Greenback experiences some mild downward pressure, it still holds its position above the crucial 105.00 level, as indicated by the USD Index (DXY). This is happening amidst the persistent upward trend in US yields across various timeframes.
Regarding monetary policy, investors are still evaluating the recent dovish rate hike conducted by the European Central Bank (ECB) and maintaining their anticipation of potential interest rate cuts by the Federal Reserve (Fed) taking place in the second quarter of 2024. On another front, EUR net longs extended the downtrend and reached levels last seen in mid-November 2022, according to the latest positioning report by the CFTC for the week ended on September 12. The period under study saw the pair climb to the 1.0750 region and quickly lose ground soon afterwards the ECB event on September 14. The absence of data releases in the euro docket should shift attention to the US calendar, where the NAHB Housing Price Index and Long-Term TIC Flows are due in the American session.
EUR/USD looks to extend Friday’s rebound from multi-week lows near 1.0630. If the EUR/USD breaks below its September 15 low of 1.0631, it may revisit the March 15 low of 1.0516 before reaching the 2023 bottom of 1.0481 seen on January 6. On the upside, the critical 200-day Simple Moving Average (SMA) is located at 1.0827. Bullish momentum may develop if the pair breaks through this key barrier, leading it to a test of the provisional 55-day SMA at 1.0922 ahead of the August 30 high of 1.0945. This scenario may open the way for a rally towards the psychological level of 1.1000 and the August 10 top of 1.1064. If the pair clears this region, it may relieve some of the bearish pressure and go for the July 27 peak at 1.1149, followed by the 2023 high at 1.1275 from July 18. As long as the EUR/USD is below the 200-day SMA, the pair might continue to fall.
EUR/USD looks to extend Friday’s rebound from multi-week lows near 1.0630. If the EUR/USD breaks below its September 15 low of 1.0631, it may revisit the March 15 low of 1.0516 before reaching the 2023 bottom of 1.0481 seen on January 6. On the upside, the critical 200-day Simple Moving Average (SMA) is located at 1.0827. Bullish momentum may develop if the pair breaks through this key barrier, leading it to a test of the provisional 55-day SMA at 1.0922 ahead of the August 30 high of 1.0945. This scenario may open the way for a rally towards the psychological level of 1.1000 and the August 10 top of 1.1064. If the pair clears this region, it may relieve some of the bearish pressure and go for the July 27 peak at 1.1149, followed by the 2023 high at 1.1275 from July 18. As long as the EUR/USD is below the 200-day SMA, the pair might continue to fall.