EUR – Euro Holds Firm in 1.16 Range, Poised for Breakout

The U.S. dollar struggled in a low range, pressured by concerns over depreciation following the U.S. Treasury's doubling of its quarterly long-term bond repurchase program, and by perceived lack of detail regarding the latest sanctions on Iran. Falling oil prices and a second consecutive day of declining Treasury yields also weighed on the dollar. Tonight's focus is on the U.S. July PCE price index and durable goods orders, followed by Fed Chairman Warsh's speech at the Jackson Hole symposium on Friday for further clues on the interest rate path, though many economists expect he may not reveal a clear policy outlook.

The euro traded in a narrow range against the dollar, hovering around 1.16. Technically, with the euro breaking above its 100-day moving average, a new upward move is expected. Initial targets are 1.17, followed by 1.18 and 1.1850, with the next level likely at 1.1920. Key levels to watch are 1.20 and the January high of 1.2081. Intraday support levels are around 1.1650 and the 250-day moving average at 1.1635. Additionally, the 100-day moving average is currently at 1.1570, which is considered a potential support level. Further support can be seen at 1.15, near the lowest level since the beginning of the month, with the next level expected at 1.1430.

Forecasted range:
Resistance 1.1700 - 1.1800 – 1.1850 – 1.1920 - 1.2000* - 1.2081
Support 1.1635/50 - 1.1570* - 1.1500** - 1.1430

News Summary

26/8
Germany Q2 GDP QoQ +0.3%, YoY +1.0%
Germany Q2 GDP YoY (Working Day Adjusted) +1.0%
France August Consumer Confidence Index 86
Germany IFO August Business Climate Index 88.8
Germany IFO August Business Situation Index 88.5
Germany IFO August Business Expectations Index 89.1

Focus:

Thursday
Germany GFK September Consumer Confidence Index (14:00)

Friday
Germany July Employment Data (15:55) Eurozone Business Climate Index for August (17:00)

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