(
MENAFN- Daily Forex)
- The EUR/USD pair failed to sustain its gains at the beginning of the week, reaching the resistance level of 1.1008, the highest for the pair since the beginning of 2024.
- Subsequently, the EUR/USD pair underwent profit-taking selling, pushing it down to the support level of 1.0881 before closing the trading session stable around the level of 1.0915.
- Concurrently, the EUR/USD performance may remain in a narrow range with a more downward bias until the financial markets react this week to the announcement of US inflation figures and statements from a number of Federal Reserve officials.
On the stock trading platforms, US stocks recorded weekly losses. According to trading, US stock indices on Wall Street closed a volatile week on a quieter note as the session was relatively quiet, with no major economic reports or earnings. The S&P 500 and Nasdaq rose 0.4% and 0.5%, respectively, while the Dow added 51 points. Overall, all sectors ended in the green, except for materials. Notable movers included Expedia, which rose 10.2% after the company reported second-quarter results that beat expectations. Also, Eli Lilly saw a boost, up 5.5%, after several Wall Street firms, including Morgan Stanley, raised their price targets on the company's stock. Take-Two Interactive Software added 4.3% after beating analysts' expectations, while elf Beauty dropped 14.4% after its quarterly results missed estimates and concerns about slowing growth. Generally, the S&P 500 ended a week of high volatility and dramatic swings, posting its fourth straight week of losses, down 0.04%, the Nasdaq down 0.2% and the Dow down 0.6%.
In the same context, European stocks closed higher. According to trades, European stocks closed a volatile session slightly higher on Friday, ending a volatile week in the green as markets continued to assess the health of recession fears in the United States and how global risk sentiment recovers from the shock of Black Monday. According to trades, the Euro Stoxx 50 index closed slightly above the flat line at 4670, up 0.7% over the week, and the Stoxx 600 European index added 0.6% at 499, up 0.3% over the week.
The financial sector continued its volatile momentum to lead gains in the session, with insurance giants Allianz and AXA adding 0.8% and 1.5% respectively, while Santander and BBVA jumped 1% each to lead banks. Meanwhile, SAP and Deutsche Telekom also closed in the green, but ASML was unable to hold onto early gains after a weak opening for Wall Street's chip giants.
Regarding the future of US interest rate policy, Federal Reserve Governor Michelle Bowman said she still sees upside inflation risks, indicating caution about cuts. Federal Reserve Governor Michelle Bowman stated that she still sees upside inflation risks and the continued strength of the labor market, indicating that she may not be ready to support interest rate cuts when US central bank governors meet next September.
Bowman added on Saturday in a speech to the Kansas Bankers Association in Colorado Springs, referring to the Fed's interest rate setting committee: "The progress in reducing inflation in May and June is a welcome development, but inflation remains uncomfortably above the Committee's 2% target." She added, "we will remain cautious in my approach to considering adjustments to the current policy stance.
She also said that U.S. fiscal policy, housing market pressures from immigration and geopolitical risks could all put upward pressure on prices. According to the economic calendar, the Fed's preferred inflation measure, the personal consumption expenditures price index, fell to 2.5 percent in the 12 months through June. As inflation nears its target, many officials have turned more attention to the labor market, which has shown signs of deteriorating under the pressure of higher interest rates.
Federal Reserve Chairman Jerome Powell said on July 31 that cutting interest rates would be on the table when policymakers meet on September 17 and 18. Expectations for a rate cut among economists and investors have strengthened after July's jobs data came in unexpectedly weak. Bowman, a former Kansas banking regulator, added that the recent rise in the unemployment rate to 4.3% may overstate the degree of labor market slowdown. She said: "The rise in the unemployment rate this year largely reflects weaker hiring as job seekers entering the labor market take longer to find jobs, while layoffs remain low."
Simultaneously, Bowman acknowledged the risks of waiting too long to cut interest rates. She said that if inflation data continues to improve, "it would become appropriate to gradually reduce the federal funds rate to prevent monetary policy from becoming excessively restrictive." Also, she emphasized that officials will receive a new set of data, including one employment report and two inflation reports, before their September meeting.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money EUR/USD Technical analysis and forecast:
The EUR/USD pair may continue to trade within a narrow range around its current levels until the financial markets and investors react to the announcement of US inflation figures and statements from a number of Federal Reserve officials. As previously mentioned, and based on the daily chart performance, bullish dominance over the EUR/USD pair will increase if it stabilizes above the psychological resistance of 1.1000. Conversely, and on the same timeframe, a return to the vicinity of the 1.0790 support will be significant in changing the pair's direction to its broader downward trend.
Ready to trade our daily Forex analysis? We've made this forex brokers list for you to check out.
MENAFN12082024000131011023ID1108545927
Comments
No comment