EURUSD Analysis
| Week Ending 2024-08-23 | |||
| Open | High | Low | Close |
| 1.11 | 1.12 | 1.11 | 1.12 |
| Performance | ||||||
| Period | Pct | Chg | Momentum | |||
| Friday | 0.62% | 69.1 Pips |  |
|||
| Week 2024-08-23 | 1.51% | 166.3 Pips |  August |
3.39% | 367.4 Pips | |
Upcoming key events for the new week (London Time)
Thu 01:00 PM CPI Inflation Rate (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims Thu 01:30 PM GDP annual rate
Fri 10:00 AM Harmonised Index of Consumer Prices (HICP) (12-mth) Fri 01:30 PM PCE Price Index (excluding food and energy) (1-mth) Fri 01:30 PM PCE Price Index (excluding food and energy) (12-mth)
What happened over the week
In the United States, Federal Reserve Chair Jerome Powell has hinted at potential rate cuts in the near future due to a cooling labor market and economic uncertainties during his speech at the Jackson Hole Symposium. Additionally, the latest data from the Department of Labor indicates that initial unemployment insurance claims rose to 232,000 for the week ending August 17, up from the revised figure of 228,000 in the previous week. This data suggests a softening in the labor market, corroborating Powell’s signals about future monetary easing.
Meanwhile, the Euro Area’s economic indicators are also showing mixed signals. According to DG ECFIN, Euro Area Consumer Confidence fell slightly to -13.4 points in August’s flash estimate, down from -13 points in July. Eurostat reports that the Harmonized Index of Consumer Prices (HICP) on both monthly and annual bases remained unchanged, with the overall index staying at 0% month-over-month in July and the core index holding steady at 2.9% year-over-year. The Euro Area Core Harmonized Index for July was reported at -0.2%, unchanged from June. Additionally, Germany, a major Eurozone economy, reported an unchanged Producer Price Index in July, which stayed at 0.2% according to the Federal Statistical Office (Destatis).
The recent rise in EURUSD, where it gained 0.62% on Friday to 1.11913 and increased by 1.51% for the week ending August 23, can be attributed to market reactions to these economic events. Powell’s indications of potential rate cuts, combined with rising unemployment claims, have led investors to anticipate monetary easing in the U.S., which usually weakens the dollar. In contrast, the Eurozone’s stable HICP figures and minimal drops in consumer confidence depict a relatively stable economic environment, albeit with no significant momentum for recovery. Consequently, the relative stability of the Euro amidst signs of easing in the U.S. could continue to support the EURUSD pair. However, upcoming events, including Germany’s CPI inflation rate and the U.S.’s GDP annual rate and PCE Price Index data, will be crucial in determining the near-term direction of EURUSD.
From X (Twitter)
What do consumers in the euro area expect will happen to inflation, their incomes, their spending and the value of their homes 12 months from now?
We’ve published the latest results of our Consumer Expectations Survey.
Press release https://t.co/lFtABYtRp1 pic.twitter.com/yUCCfxdMyk
— European Central Bank (@ecb) August 23, 2024
Speech by Chair Powell on the economic outlook at an economic policy symposium sponsored by @KansasCityFed: https://t.co/oBbmwVLBAz
Watch live: https://t.co/xOEbfu9h6K pic.twitter.com/WxwdMOn7jJ
— Federal Reserve (@federalreserve) August 23, 2024
What can we expect from EURUSD for the new week and what happened on Friday?
EURUSD on Friday rose 0.62% to 1.12. Price is above 9-Day EMA while Stochastic is falling in overbought zone. For the week ending 2024-08-23, the pair rose 1.51% or 166.3 pips higher.
Looking ahead, EURUSD looks bullish as the pair ended higher after Friday trading session.
For the new week, our technical outlook looks bullish, immediate upside resistance level at 1.12 (WR1) with break above could target 1.13 (WR2). On the downside, we are looking at week low of 1.11 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.12 would suggest bullish bias after recent positive movement.
For the month of August, EURUSD is up by 3.39% or 367.4 pips higher.
Weekly key levels to watch out:
| R3 | 1.14 |
| R2 | 1.13 |
| R1 | 1.12 |
| Weekly Pivot | 1.12 |
| S1 | 1.11 |
| S2 | 1.10 |
| S3 | 1.10 |
You might also be interested in:
Powell, Review and Outlook Source: Federal Reserve
In August 2024, the business climate in France has partially recovered Source: INSEE In August 2024, the business climate in services has partially recovered Source: INSEE In August 2024, the business climate has slightly rebounded in retail trade and in trade and repair of motor vehicles Source: INSEE In August 2024, the business climate in the building construction has brightened slightly Source: INSEE In August 2024, the business climate in manufacturing industry has clearly rebounded Source: INSEE Quarterly Services Survey Source: Census Bureau Minutes of the Federal Open Market Committee, July 30–31, 2024 Source: Federal Reserve
Annual inflation up to 2.6% in the euro area Source: Eurostat Production in construction up by 1.7% in the euro area and by 1.4% in the EU Source: Eurostat