Technical Analysis

EUR/USD Price Analysis – Aug 15, 2023

By LonghornFX Technical Analysis
Aug 15, 20233 min

Daily Price Outlook

The EUR/USD currency pair managed to bounce back from its previous losses and is now above 1.0900 in the early European session on Tuesday. It is currently trading around 1.0923, up by 0.17% for the day. However, the positive European data boosted the shared currency and contributed to the pair's gains. In contrast to this, the strong US dollar, supported by expectations of higher interest rates from the Federal Reserve, limited the pair's upward movement. Looking forward, the EUR/USD pair might see changes as we await US Retail Sales data, which could bring volatility ahead.

Mixed Data and Uncertainty Affect EUR/USD Currency Pair

According to recent news, Germany's Wholesale Price Index (WPI) for July increased slightly to -2.8% YoY from -2.9% before, but it was lower than the expected -2.6%. The monthly Wholesale Price Index was -0.2%, which is better than the expected -1.4%. However, the European Central Bank's latest report mentioned that the Eurozone's inflation might stay high for a while, and the outlook for economic growth and inflation is still uncertain.

Thus, the impact of this news on the EUR/USD currency pair could be seen as relatively negative due to the uncertainty surrounding inflation and economic growth in the Eurozone. These factors could impact the EUR/USD pair's movements in the coming days.

US Dollar and Upcoming Influences on EUR/USD Pair

The broad-based US dollar has been on the rise and gained signficant traction over the past few days, which has undoubtedly weighed on the EUR/USD currency pair. Apart from this, the Fed San Francisco President Mary C. Daly mentioned that it's too early to decide on more rate increases or keeping rates steady. This uncertainty limits the Euro's strength and affects the EUR/USD pair negatively.

Looking ahead, investors are watching US Retail Sales later today. The Fed is expected to keep rates unchanged in September, with inflation in check. But chances of a 0.25% rate hike in November are up to nearly 40%.

Upcoming Events Shaping EUR/USD Pair's Direction

Looking forward, investors are anticipating the release of US Retail Sales data later today, with expectations of a 0.4% monthly increase in July. As the week progresses, attention will shift to Eurozone's Q2 GDP and July's Consumer Prices Index figures. Furthermore, the FOMC Minutes will be closely watched for potential market-moving insights. These upcoming events and reports are likely to influence the movements of the EUR/USD pair in the coming days.

EUR/USD Price Chart – Source: Tradingview
EUR/USD Price Chart – Source: Tradingview

EUR/USD - Technical analysis

The EUR/USD pair is currently hovering around the 1.0900 mark. It's noteworthy that the stochastic indicator is displaying a diminishing bullish momentum, which could potentially prompt the pair to continue its downward trajectory, breaking below the 1.0880 threshold and aiming for the subsequent target of 1.0785.

Given the backdrop of the recently formed double top pattern, coupled with the bearish influence exerted by the EMA50, we anticipate a continued bearish outlook. It's pivotal to highlight that maintaining levels below 1.1030 is crucial for the continuation of this predicted bearish momentum.

For today, the trading spectrum is projected between a support level of 1.0830 and a resistance level of 1.0980.



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