Market Analysis

EUR/USD Surges Above 1.1000 Amid Weak US Dollar

Dupoin · 06 Aug15.7K Views

EURUSD

Prediction: Increase

Fundamental Analysis:

The EUR/USD pair extended its strong recovery from Friday, momentarily crossing the key 1.1000 level at the start of the new trading week. This upward momentum was fueled by a notable decline in the US Dollar (USD), which dropped to levels not seen since January, around the 102.00 mark. Investors are weighing the disappointing US economic data from last week against the potential for the US economy to slide into recession this year, which could prompt the Federal Reserve to consider an inter-meeting rate cut and further interest rate reductions.

Technical Analysis:

On the upside, the EUR/USD faces its first hurdle at the August high of 1.1008 (August 5), followed by the December 2023 peak of 1.1139 (December 28). On the downside, support is seen at the 200-day SMA at 1.0827, followed by the weekly low of 1.0777 (August 1) and the June low of 1.0666 (June 26), before reaching the May low of 1.0649 (May 1). From a broader perspective, the pair is expected to maintain a positive outlook if it convincingly breaks above the 200-day SMA. The four-hour chart currently indicates renewed bullish momentum, with immediate resistance at 1.1008, followed by 1.1139. Conversely, initial support is at 1.0777, with further support at 1.0709. The relative strength index (RSI) has eased to around 68.

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