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Highlights
- It is another busy day ahead for the EUR/USD as the dust settles from the ECB President Lagarde press conference.
- French and German GDP and inflation numbers will draw interest ahead of a busy US session.
- The nearer-term technical indicators are bearish, with the bears eying sub-$1.10.
On Thursday, the EUR/USD tumbled 1.00% to wrap up the day at $1.09752. Hotter-than-expected US GDP numbers and the ECB President Lagarde press conference sank the EUR.
French and German GDP and inflation figures will move the dial this morning. Softer inflation and weaker-than-expected GDP numbers would support the ECB hitting the brakes on its monetary policy tightening cycle.
No ECB members are on the calendar to speak, leaving chatter with the media to move the dial.
The US Session
US Core PCE Price Index and personal spending numbers will be the stats to track. Fed Chair Powell left the door ajar for a September rate hike. A hotter-than-expected core PCE price index and personal spending would support a more hawkish Fed policy outlook.
The Core PCE Price Index is the Fed’s preferred inflation indicator. Sub-4% would likely shut the door on the Fed hawks. However, personal spending needs consideration, with a pickup in spending likely to drive consumer price inflation through demand.
EUR/USD Price Action
Daily Chart
The Daily Chart showed the EUR/USD hover below the $1.1060 – $1.1015 support band. Despite the Thursday sell-off, the EUR/USD remained above the 50-day ($1.09714) and 200-day ($1.07799) EMAs, signaling bullish momentum over the near and longer term.
A EUR/USD hold above the 50-day EMA would support a move through the $1.1015 – $1.1060 support band to target $1.11. However, a fall through the 50-day EMA ($1.09714) would bring sub-$1.09 into view.
Looking at the 14-Daily RSI, the 45.95 reading sent bearish price signals. The RSI aligned with the 50-day EMAs, supporting a EUR/USD fall toward sub-$1.09.
4-Hourly Chart
Looking at the 4-Hourly Chart, the EUR/USD sits below the $1.1060 – $1.1015 support band. However, the EUR/USD also sat below the 50-day ($1.10867) and 200-day ($1.10119) EMAs, sending bearish near and longer-term price signals.
Significantly, the 50-day EMA narrowed on the 200-day EMA, signaling a fall to sub-$1.0950 to bring sub-$1.09 into view. However, a move through the 200-day EMA ($1.10119) and the support band would give the bulls a run at the 50-day EMA ($1.10867).
The 14-4H RSI at 32.73 sends bearish EUR/USD price signals, with selling pressure outweighing buying pressure. Significantly, the RSI aligns with the EMAs, signaling a fall to sub-$1.09.
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