The bears will target long-term profits at around 0.9920 or lower at 0.9770.
Investors’ desire to buy the US dollar and abandon the euro due to concern about a bleak future for the recovery of the euro bloc contributed to the increase in the selling operations of the EUR/USD currency pair. This is with losses that reached the 1.0032 support level, the lowest in five weeks, and closed last week’s trading stable around those losses. The euro is on track to fall 1.7% since last Friday, which would be its worst trading week since July 8. The British pound is on its way to recording its worst week in more than a year and is headed for a 2% drop. This performance of the most famous currency pair in the forex market is on an important date this week with the announcement of the growth rate of the US economy, along with the Jackson Hole Symposium event, which will have a strong reaction to the expectations of raising US interest rates in the remainder of 2022.
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In this regard, the President of the Federal Reserve Bank of Lewis, James Bullard, said that he is leaning towards supporting the US interest rate hike for the third time in a row by 75 basis points in September, while Mary Daly, a colleague at the Federal Reserve Bank in San Francisco, said that raising interest rates by 50 Or 75 basis points next month would be “reasonable.” Kansas City Fed President Esther George said she and her colleagues won’t stop tightening policy until they are “fully convinced” that hyperinflation is going down.
The EUR/USD currency pair is trading affected by the announcement that the European Union Harmonized Index of Consumer Prices (HICP) for the month of July matches the expected (monthly) change of 0.1% with a reading of 0.1%, while the equivalent (based on annual) in line with 8.9%. The previous HICP index for food, energy and air transport also matched expectations on a monthly (monthly) and (annual) basis. Prior to that, it was announced that the European primary GDP for the second quarter fell from the expected change in the ninth quarter of the year by 0.7% with a change of 0.6%, while the equivalent (on an annual basis) also came less than 4% with a change of 0.6%. 3.9%.
In the United States, initial US jobless claims for the week ending August 12 exceeded the expected claim count of 265K with a lower count of 250K. On the other hand, the continuing claims of the previous week beat the expected figure of 1.438 million with 1.437 million. Prior to that, US retail sales numbers for July beat the expected 0.6% change with a 0.8% change, while general retail sales fell 0.1%, down 0% month-on-month.
Technical analysis of the EUR/USD pair:
In the near term and according to the hourly chart, it appears that the EUR/USD pair has recently completed a bearish breakout from forming an ascending channel. This indicates a significant shift in market sentiment in favor of the bears. Therefore, they will look to extend the current declines towards the 1.0000 support or lower to 0.9945 and on the other hand, the bulls will look to take profits around 1.0112 or higher at 1.0143.
In the longer term and according to the performance on the daily chart, it appears that the EUR/USD currency pair has recently completed a downside breakout forming an ascending channel. This indicates that the bears are trying to control the pair. Therefore, the bears will target long-term profits at around 0.9920 or lower at 0.9770. On the other hand, the bulls will look to see a bounce around 1.0196 or higher at 1.0371.
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