EUR/USD weekly forecast: Euro to Dollar outlook for August 19, 2024

EUR/USD overview:

The EUR/USD pair ended last week on a strong note, pushing up to a seven-month high of 1.1029. The rally was fuelled by upbeat U.S. retail sales, lower jobless claims, and easing inflation concerns, which have raised market expectations for a potential Fed rate cut in September. This week, attention turns to key economic data releases and the Jackson Hole Symposium, where Fed Chair Jerome Powell’s speech could set the tone for the next phase of monetary policy.

The EUR/USD pair is trading around 1.1035, showing bullish momentum with support from several key technical indicators:

•  RSI: Hovering near the overbought level of 70, signaling potential exhaustion in the current rally.

•  MACD: Remains bullish with expanding histogram bars, indicating strong momentum.

•  Support and Resistance: Immediate support is around 1.1022, with resistance at 1.1100 and 1.1275 if the uptrend continues.

This week is packed with significant economic events that could heavily influence the direction of the EUR/USD pair.

1.  Wednesday, August 21st

FOMC Meeting Minutes (USD): Traders will be looking for clues on the Fed’s future monetary policy stance. Any signs of continued hawkishness could strengthen the USD and put pressure on EUR/USD.

2.  Thursday, August 22nd:

French, German, and Eurozone PMI Data (EUR): These data releases will provide insight into the economic health of the Eurozone. Weak numbers could weigh on the euro, while stronger-than-expected data might support further gains.

 US Unemployment Claims and Flash Manufacturing PMI (USD): Both data points are crucial for assessing the strength of the US economy. A stronger US job market could limit gains for the EUR/USD pair.

3.  Friday, August 23rd:

 Jackson Hole Symposium (Global): This annual event will likely bring volatility as global central bankers discuss future monetary policies. Fed Chair Powell’s comments could be especially impactful for the USD.

Bullish Scenario: A breakout above 1.1100 could open the door for further gains toward 1.1200 and potentially test 1.1275 if Eurozone PMI data beats expectations and the Fed signals dovish intentions.

Bearish Scenario: If the pair fails to sustain above 1.1030 and strong U.S. data pushes the dollar higher, the EUR/USD could revisit support at 1.0950 or even drop to 1.0880.

Neutral Scenario: A neutral outlook may unfold if the pair consolidates within the 1.0950-1.1100 range. This could occur if the Fed minutes and Powell’s speech offer no clear direction, leaving the market in a holding pattern until more decisive data emerges.

The EUR/USD pair is at a critical juncture this week, with technical pointing toward further upside but significant event risks could quickly change the landscape. Be prepared for potential volatility, particularly around key levels and during the Jackson Hole Symposium.

This analysis is for informational purposes only and does not constitute investment advice. Trading in financial markets involve significant risk of loss. Past performance is not indicative of future
results. Please seek independent financial advice before making any investment decisions. Full Disclaimer