EUR – The euro remains range-bound

The euro hit its lowest level against the dollar since August 6th on Wednesday before stabilizing. Market participants remain on the sidelines ahead of Friday's release of the US core personal consumption expenditures (PCE) price index. New York Fed President John Williams said on Wednesday that a rate cut is possible at some point, but policymakers will need to see the economic conditions reflected in upcoming data before deciding whether a cut is appropriate at the September 16-17 meeting. According to the CME FedWatch tool, money markets are pricing in an 87% probability of a 25 basis point rate cut in September.

Over the past two weeks, the euro has been trading broadly sideways against the dollar, with fluctuations limited to approximately 1.16 to 1.1730. If this level is seen, it could be in a bearish pattern. However, given that the 10-day moving average has broken below the 25-day moving average, the chances of a breakout are slightly higher. 1.1730 represents a recent downtrend line, with resistance seen at 1.18 and even 1.1829 on July 1. A break above this level could further solidify the euro's upward trend. Extended targets include 1.20 and 1.2150. Nearest support is expected at the 25-day moving average of 1.1630 and 1.1570, with the next level at 1.15.

Forecast range:
Resistance: 1.1730 - 1.1830 - 1.2000* - 1.2150
Support: 1.1630 - 1.1570 - 1.1520 - 1.1480

News summary:
25/8
Germany's August Business Climate Index rose to 89.0, the highest since May last year.

Focus:
Thursday
Eurozone August Economic Sentiment Index (5:00 PM)

Friday
Germany July Real Retail Sales (2:00 PM)
Germany August Unemployment and Unemployment Rate (3:55 PM)
Germany August CPI and Preliminary Harmonized Index of Consumer Prices (HICP) (8:00 PM)

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