**Euro under Pressure: Dollar Rally Intensifies as EUR/USD Dips Near Multi-Week Lows** *By Mitrade News Team*

**EUR/USD Forecast: Dollar Bulls Eye Next Move as Euro Slides**
*By Mitrade News Team*

The U.S. dollar surged on Thursday, maintaining its momentum and keeping the EUR/USD pair near multi-week lows. Hawkish signals from Federal Reserve officials, along with robust U.S. economic data, fueled bets that the Fed will keep rates elevated for longer than previously anticipated. Meanwhile, the euro struggled, unable to find support from either the economic calendar or European Central Bank (ECB) policy expectations. This article examines the latest market moves, drivers behind the EUR/USD slide, and what traders should watch going into next week.

**Dollar Bulls Dominate as Fed Signals Stay Hawkish**

The Federal Reserve’s narrative remains key to current forex market dynamics. On Thursday, several Fed officials emphasized a data-dependent policy stance, but leaned towards caution in cutting rates prematurely. This prudent tone reinforced market sentiment that the period of elevated U.S. rates will persist.

– Fed Governor Lisa Cook stated that recent inflation developments were encouraging, but the job is not yet finished, and a few more months of good data would be needed before considering a change in policy.
– Federal Reserve Bank of Atlanta President Raphael Bostic echoed a similar stance, signaling patience and indicating that cuts could arrive later than markets initially anticipated.

This persistent hawkishness drove the Dollar Index (DXY) to its highest level in over a month, supported by:

– Stronger U.S. economic data, particularly robust labor market readings and healthy consumer spending.
– Dampened expectations for an early Fed rate cut, now priced in for later in the year or early next year, according to CME’s FedWatch tool.

**U.S. Data Keeps Pressure on EUR/USD**

The latest U.S. data releases have surprised to the upside, cementing the dollar’s gains and undermining the euro.

– Weekly unemployment claims were lower than expected, confirming ongoing labor market strength.
– Durable goods orders and consumer spending figures both pointed towards resilient economic activity.
– Inflation reels, while showing moderation, are not yet subdued enough to prompt an imminent Fed policy shift.

These positive data points have encouraged dollar bulls to keep pressing higher, weighing heavily on EUR/USD.

**ECB Policy Divergence Adds to Euro’s Pain**

In contrast, the European Central Bank remains caught between slowing growth and persistent inflation. Thursday saw ECB policymakers signaling a cautious approach, but with less conviction than their U.S. peers.

– ECB’s Philip Lane highlighted ongoing “uncertainty about the growth and inflation outlook,” suggesting the bank needs to see more data before making further policy moves.
– Market expectations for another rate cut by year-end remain, especially as eurozone data shows softness across manufacturing and services sectors.

This divergence between Fed and ECB policy paths has been a significant source of downward pressure on EUR/USD.

**Technical Analysis: EUR/USD at Key Support**

As of Thursday’s close, EUR/USD remains well below its 1.0800 handle, printing new multi-week lows and signaling the risk of further declines.

– The pair fell below key support at 1.0780, which had previously provided a floor through late June and early July.
– Daily Relative Strength Index (RSI) readings are not yet in oversold territory, suggesting sellers could test deeper supports.

Key technical levels to watch include:

– **Resistance**
– 1.0800: Psychological barrier and former support, likely to act as near-term resistance.
– 1.0860: 50-day moving average and recent swing high.
– **Support**
– 1.0760: Immediate support below current levels.
– 1.0700: Significant psychological and technical support zone.
– 1.0635: June’s swing low.

Price action suggests that a close below 1.0760 could spark further downside, with the 1.0700 level acting as the next major target for bears.

**Factors Influencing EUR/USD in the

Read more on GBP/USD trading.

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