EUR/USD Forecast Today 30/8: Euro Falls After GDP (Chart)
Date
8/30/2024 4:52:58 AM
(MENAFN- Daily Forex)
In my daily analysis of the EUR/USD currency pair, the first thing I notice is that we are pulling back quite drastically, which of course makes a certain amount of sense considering that the market had gotten far too ahead of itself. We are likely to continue to look at the 1.12 level above as a major resistance barrier. At this point in time, and then we have to look at the GDP numbers coming out the United States be hotter than anticipated as a bit of a harbinger as to how things may or may not turn out.
All things being equal, it's going to be crucial to pay attention to the Core PCE Price Index, as it comes out on Friday, and it is the Federal Reserve's favorite indicator on inflation. If it comes out hotter than the expected 0.2%, that could send the US dollar strengthening quite drastically, and it will of course have a major influence on this pair as the euro is considered to be the“anti-dollar.”
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This is a market that is going to see a lot of volatility, and quite frankly I think they are too ahead of themselves when it comes to getting excited about the euro. The Fed Funds Futures market has priced in the idea of 100 basis points of interest rate cuts between now and the end of the year, which is absolutely ridiculous as it wouldn't necessarily be a good thing, it be a sign that the US economy is collapsing, and therefore people would be running to the US dollar for safety anyway the Dip?
The question at this point in time is whether or not we are going to be buying the dip, and I believe that the most likely of areas would be the 1.10 level, which is an area that previously has been resistance previously, and therefore it's likely that the market is going to continue to see a lot of noise in that area, and that could be a significant amount of potential buying pressure. If that does happen, then it might be a nice buying opportunity, but we will have to see how the market behaves to that region if and when we get down there.
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