EUR/USD remains firm above the crucial support of 1.1150 in Friday’s European trading hours. Lately, the major currency pair has performed strongly due to weakness in the US Dollar (USD). The US Dollar Index (DXY), which gauges the Greenback’s value against six major peers, hovers above the year-to-date low of 100.21.
The Greenback has weakened following the Fed’s bumper interest rate cut decision and increasing market expectations that the US central bank will continue with an aggressive policy-easing cycle. The Fed reduced interest rates by 50 basis points (bps) as policymakers seem to focus on reviving labor market strength as inflation is declining to the bank’s target of 2%.
On the interest rate guidance, Fed policymakers see the federal fund rate heading to 4.4% by year-end, according to the latest dot plot. However, traders expect interest rates to decline further, by 75 bps to 4.00%-4.25%, according to the CME FedWatch tool.
The preliminary consumer confidence reading for the Eurozone will be published at 14:00 GMT. Expectations are for a slight improvement of the index, to -13 in September from -13.5 in August.
In Friday’s New York session, US investors will focus on Philadelphia Fed Bank President Patrick Harker’s speech at 18:00 GMT for fresh guidance on interest rates.
EUR/USD holds trade above 1.1150 in European trading hours. The near-term outlook of the shared currency pair is upbeat on the upward-sloping 20-day Exponential Moving Average (EMA) near 1.1088.
The major currency pair remains firm as it has confidently recovered after retesting the breakout of the Rising Channel chart pattern formed on a daily time frame near the psychological support of 1.1000.
The 14-day Relative Strength Index (RSI) moves higher above 60.00. A bullish momentum would trigger if it sustains above the aforementioned level.
Looking up, the round-level resistance of 1.1200 will act as a major barricade for the Euro bulls. A decisive break above the same would drive the asset toward July 2023 high of 1.1276. On the downside, the psychological level of 1.1000 and the July 17 high near 1.0950 will be major support zones.
Patrick T. Harker took office on July 1, 2015, as the eleventh president and chief executive officer of the Third District Federal Reserve Bank, at Philadelphia. In 2016, he serves as an alternate voting member of the Federal Open Market Committee.
Read more.Next release: Fri Sep 20, 2024 18:00
Frequency: Irregular
Consensus: -
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Source: Federal Reserve
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