Daily Technical Analysis EUR/USD: The Pair Rises Nearly 1% This Week Ahead of Jackson Hole

The most important event this week is the Federal Reserve’s Jackson Hole symposium, where Fed Chairman Jerome Powell is expected to speak publicly on Friday. At the same time, the market will focus on whether expectations of a 100 basis point rate cut by the central bank this year will be confirmed. Another factor that could become more favorable for the Euro and detrimental to the Dollar in the coming days, weeks, and months is the latest developments in the US election polls, which now seem to indicate that the Democratic Party candidate, Kamala Harris, is ahead of former President and Republican Party candidate Donald Trump in several key swing states.

On Tuesday, EUR/USD rose 0.4% and broke above 1.1100 for the first time since December 2023, reaching a new high for 2024. EUR/USD has now been in positive territory for three straight days and appears to be on track for a 1% gain since the market opened on Monday.

Early Thursday, the results of the pan-European Purchasing Managers’ Index (PMI) survey will be released, with the August Eurozone manufacturing and services PMIs expected to hold steady at 45.8 and 51.9, respectively.

Thursday will bring the results of the U.S. Purchasing Managers’ Index (PMI) business activity survey, as well as the start of the annual Jackson Hole Symposium, which will extend through the weekend. The minutes of the Fed’s latest meeting are due to be released on Wednesday, although markets will generally be fully focused on Thursday’s releases, looking for reasons or signals to move the market.

The U.S. manufacturing PMI is expected to hold steady at 49.6 for the month of August, while the services PMI is expected to drop one point to around 54.0 from 55.0. The start of the Jackson Hole Symposium is expected to draw much of investors’ attention on Thursday, although it is worth noting that Friday’s appearance by Fed Chairman Jerome Powell will likely indicate the overall market outlook for the week ahead.

EUR/USD Daily Technical Analysis for August 21th:

EUR/USD has made a new high for 2024, breaking above 1.3050, as markets sell the US dollar in the short term on a general level, rather than for any specific reason related to the single currency’s rise in price. It must be noted that EUR/USD has closed in the green for all but one of the last seven trading days and is in a bullish zone above the 200-day exponential moving average (EMA) at 1.0835.

However, the long-term consolidation range is strong on the technical charts, and a sharp reversal could trigger a move back below 1.1000.