**EUR/USD Price Prediction: Can Bulls Defend 1.1650 Support as September Volatility Builds?**
*Originally written by The Tradable, rewritten for enhanced depth and clarity.*
As the currency markets wade deeper into September, volatility is on the rise, and pressure on the euro is mounting. The EUR/USD pair, one of the most heavily traded in the foreign exchange market, is under key scrutiny as it approaches a crucial support level at 1.1650. Market participants are closely monitoring this threshold as a potential turning point, determining whether bullish sentiment can prevail or if further downside pressure will drag the pair lower.
This article offers a comprehensive analysis of the current dynamics influencing the EUR/USD pairing, macroeconomic factors that influence sentiment, technical chart formations, and potential scenarios into late Q3 2024.
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### Key Themes Driving Current EUR/USD Price Action
Several interrelated factors are contributing to market moves in the EUR/USD pair. These elements go beyond traditional currency drivers and encompass broader macroeconomic and geopolitical developments:
– **Federal Reserve Rate Speculation**
The U.S. Federal Reserve continues to exert a commanding influence on forex markets. As inflation data releases remain elevated and the jobs market shows resilience, expectations around future interest rate hikes have heightened. Traders are pricing in a potentially more aggressive monetary policy stance from the Fed, thereby boosting demand for the U.S. dollar.
– **European Central Bank (ECB) Policy Divergence**
In contrast, the ECB remains cautious with its tightening policies. Concerns over stagnant growth, energy-related inflation pressures stemming from external geopolitical tensions, and weak consumer demand have constrained the ECB’s willingness to act swiftly. Rate hike expectations remain tempered, pressuring the euro.
– **Energy Crisis & German Economic Weakness**
Energy shortages remain a formidable concern across the eurozone, particularly in Germany. The ongoing ripple effects of supply chain interruptions have had a tangible impact on industrial output and consumer confidence. Germany’s economic slowdown acts as a drag on broader eurozone performance, further weakening the euro.
– **U.S. Dollar Strength as a Safe-Haven Currency**
Global risk-off sentiment, spurred by interest rate uncertainty, emerging market volatility, and geopolitical tensions, has amplified safe-haven flows into the U.S. dollar. This has put structural pressure on EUR/USD and diminished bullish momentum in the pair.
– **September Seasonal Volatility**
Historically, September is a turbulent month across global financial markets. Rebalancing portfolios, end-of-quarter adjustments, and positioning ahead of possible fourth-quarter economic shifts add volatility to major currency pairs such as EUR/USD.
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### Technical Outlook: EUR/USD at Critical Support
As of mid-September, EUR/USD is hovering dangerously close to the 1.1650 support zone. This is a level of technical and psychological significance, having been tested several times in 2021 and 2022.
#### Key Technical Indicators:
– **Support Level at 1.1650**
The 1.1650 area has acted as a firm support region in past trading cycles. A decisive breakdown below this level could open the door for further declines towards the 1.1500 zone.
– **Resistance Near 1.1800**
On the upside, 1.1800 remains a key resistance area. A clear break above this level would indicate a reversal in bearish sentiment and potentially catalyze further euro strength.
– **Trend Analysis**
The pair is currently trading below its 50-day and 200-day moving averages, signaling an established bearish trend. Both moving averages are sloping downward, confirming sustained downward momentum.
– **Relative Strength Index (RSI)**
The RSI on the daily chart lingers near the oversold territory, floating around the 35 level. While this indicates that the pair may be due for a short-term bounce, it is not yet confirming a full bullish reversal.
– **MACD (Moving
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