EUR/USD Forex Signal 28/08: On The Cusp Of A Jump (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1825.
• Add a stop-loss at 1.1500.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1500.
• Add a stop-loss at 1.1825.

The EUR/USD pair was flat this week, even after Donald Trump fired Lisa Cook, a Federal Reserve governor, who vowed to sue. It was stuck at 1.1625, up slightly from this week's low of 1565 Inflation Data Ahead

The EUR/USD pair moved sideways this week after Donald Trump fired Cook, a Federal Reserve Governor appointed by Joe Biden, citing her mortgage applications.

The mild reaction was likely because market participants believe that she will win the lawsuit, as Federal Reserve governors can only be fired for a cause.

Trump's actions are part of a pressure campaign for the Fed to start cutting interest, a move he believes will boost the economy, which is now dealing with high inflation and rising unemployment rate.

The EUR/USD will react mildly to the upcoming US GDP data, which will provide more information on how the economy grew in the second quarter. The first estimate showed that the economy grew by 3.1%, a big increase after it contracted in the first quarter because of the surge in exports.

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In most periods, the US GDP data, especially the second estimate, does not have a major impact on the US dollar because the final report does have a major divergence with the analyst estimate.

The US will release the initial and continuing jobless claims data and pending home sales numbers, which will provide more information about the state of the economy.

The most important report of the week will be Friday's personal consumption expenditure (PCE), which is the Federal Reserve's most important inflation gauge.

Economists expect the data to show that the headline and core inflation to come in at 0.3% on a month-on-month basis. This growth will translate to an annualized PCE of 2.6%, higher than the Fed's 2.0%.

EURUSD Chart by TradingViewEUR/USD Technical Analysis

The EUR/USD exchange rate has remained in a narrow range in the past few days.. It was trading at 1.1632, on the edge of the upper side of the Ichimoku cloud indicator.

The pair has slowly formed an inverse head-and-shoulders pattern and is now slightly below the neckline. It has remained above the 50-day moving average, a sign that bulls are in control.

Therefore, the pair will likely have a strong bullish breakout in the next few days, possibly when the US releases the August nonfarm payroll report.

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