Euro (EUR) Latest: EUR/USD Hit by Dollar Strength, EUR/GBP Bounces Off Support
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EUR/USD and EUR/GBP Forecast - Prices, Charts, and Analysis
- Euro weakness and US dollar strength weigh on EUR/USD.
- EUR/GBP continues to respect the multi-month range.
The Euro remains on the back foot after Wednesday’s anemic PMIs showed the single bloc’s economy struggling to make any headway. The latest ECB ‘sources’ talk is that momentum is growing for the European Central Bank to pause any further rate hikes as recession fears grow. Weak growth, benign wage growth, the slowdown in Chinese economic activity, and improved policy transmission are all noted, although the ‘sources’ add that the central bank would also make clear that futures rate hikes may still be needed. ECB President Lagarde is speaking today at the Jackson Hole Symposium and it will be interesting if these source reports are preparing the ground for the ECB to make a slight dovish turn, or if there is a rift building in the central bank over monetary policy.
The latest German Ifo business sentiment report also underlines the weakness in Europe’s largest economy. All three indicators came in below last month’s release and missed market expectations.
The daily EUR/USD chart is showing the effect of a strong US dollar and a weak Euro with the pair down nearly five big figures since the July 18 high at 1.1276. EUR/USD is below both the 20- and 50-day simple moving averages and is currently the longer-dated sma. The CCI indicator (bottom of the chart) shows the pair in heavily oversold territory and these may need to be pared back before a further move lower. The late May swing low at 1.0635 is the first bearish target.
EUR/USD Daily Price Chart – August 25, 2023
Chart via TradingView
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EUR/GBP remains rangebound despite briefly breaking support on Wednesday. Both currencies remain weak and while this remains the case, the multi-week range between 0.8504 and 0.8700 should still hold.
EUR/GBP Daily Price Chart – August 25, 2023
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