Daily Technical Analysis EUR/USD: stabilizes under 1.1650 as markets anticipate Powell’s speech in Jackson Hole

EUR/USD eased on Monday, trading near 1.1700 after advancing around 1% in the previous session. However, losses may remain capped as the US Dollar (USD) continues to face pressure from rising expectations of a Federal Reserve (Fed) rate cut in September, following Fed Chair Jerome Powell’s remarks at the Jackson Hole symposium.

Powell acknowledged growing risks to the labor market while reiterating that inflation remains a concern, stressing that no policy decision is yet finalized. He also noted the Fed may not need to tighten further based on uncertain estimates that employment could be running above its sustainable level.

According to the CME FedWatch Tool, markets now assign nearly an 85% probability of a 25 bps rate cut in September, up from 75% before Powell’s comments. Attention now turns to Friday’s releases of Q2 US GDP (annualized) and July PCE Price Index data, the Fed’s preferred inflation measure.

From Europe, ECB Governing Council member Joachim Nagel stated that rate cuts would require a material deterioration in the economic outlook, while fellow policymaker Martins Kazaks signaled that the ECB has entered a new phase where officials will focus on monitoring the economy rather than active intervention, Bloomberg reported.

EUR/USD Daily Technical Analysis – August 25

The daily chart for EUR/USD remains constructive. Technical indicators are recovering from midline levels, maintaining upward slopes. Buyers continue to defend the downside around the mildly bearish 20 SMA at 1.1610, while the bullish 100 SMA offers stronger support at 1.1480.

Resistance is seen at 1.1730, where the pair has stalled for a second consecutive week. A break above would open the door toward the yearly high at 1.1830, with further gains potentially targeting the 1.1900 threshold. On the downside, initial support lies at 1.1650, followed by 1.1590.