**EUR/USD Technical Forecast for August 29, 2025**
*Adapted from an article originally published by Christopher Lewis on DailyForex.com*
The EUR/USD currency pair continues to demonstrate a notable degree of uncertainty as the forex markets look for alternating signs of momentum and potential direction. The pair has recently exhibited weak bullish activity, but broader trends suggest that downside pressure may still prevail. Market participants are navigating through multiple layers of economic data, central bank commentary, and technical patterns to determine the most probable direction of the euro relative to the United States dollar. Below is an in-depth exploration of the EUR/USD’s technical configuration, economic context, and projected outlook.
**Current Market Overview**
– The EUR/USD pair has been hovering just above the 1.08 handle, encountering resistance near 1.0850.
– Despite a modest bounce from recent lows, the technical structure on longer time frames remains bearish.
– Although there has been a slight recovery in short-term sentiment, the euro faces multiple headwinds against the backdrop of a strong U.S. dollar.
**Price Action Analysis**
– The last several trading sessions have seen prices oscillate between 1.0775 and 1.0850, forming a short-term consolidation zone.
– This price consolidation is taking place beneath the 50-day and 200-day exponential moving averages (EMAs), widely regarded as signals of trend direction.
– The fact that prices are not breaching above these moving averages suggests caution among bulls and a lack of decisive buying momentum.
– The Relative Strength Index (RSI) on the daily chart has recovered slightly but remains close to neutral levels, implying no strong overbought or oversold condition.
– Candlestick patterns on the daily time frame show intermittent buying interest, though none have formed a clear reversal setup.
**Technical Levels to Watch**
*Support Levels*
– 1.0775: The first key short-term support level, which has previously acted as a minor demand zone.
– 1.0700: A psychologically significant point that could trigger renewed buying if approached.
– 1.0635: The recent swing low from early August that provided a key bounce, now acting as a critical line in the sand.
*Resistance Levels*
– 1.0850: This level has consistently capped rallies in recent sessions.
– 1.0925: Higher resistance and a previous consolidation area; a break above this would signal a stronger bullish reversal.
– 1.1000: A critical psychological and technical barrier, previously tested in June.
**Trend Dynamics**
– The primary trend remains bearish, clearly indicated by the sequence of lower highs and lower lows on the daily chart.
– Attempts to form bullish retracements have not resulted in meaningful follow-through, highlighting the strength of the downtrend.
– If prices continue to stay below the key EMAs and trend indicators, the probability of a larger decline remains elevated.
**Moving Averages Summary**
– 50-day EMA: Acting as dynamic resistance, currently positioned near 1.0860.
– 200-day EMA: Carrying more weight for long-term analysts, currently around 1.0940.
– The slope of both EMAs is negatively aligned, showing downward momentum.
**Eurozone Economic Influences**
– Recent European Central Bank (ECB) comments have leaned toward a dovish tone, reinforcing downside risks for the euro.
– Disappointing economic data from Germany and France, particularly weaker-than-expected industrial output and consumer sentiment figures, have put further pressure on the euro.
– Inflation readings within the Eurozone remain subdued, reducing the likelihood of near-term ECB tightening.
– Sovereign debt yields across Europe have declined, diminishing the euro’s relative appeal from a rate differential perspective.
**U.S. Dollar Strength Factors**
– The Federal Reserve has maintained a hawkish position in recent communications, frequently citing persistent inflation and a robust labor market.
– Upcoming non-farm payroll
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