Current dynamics

During the Asian session, the European currency shows weak growth in the EUR/USD pair, uncertainly developing an uptrend in the short and super short-term outlook and testing the 1.0830 level in an upward breakout, while traders They are in no hurry to open new positions before the release of key macroeconomic statistics this week.

Thus, today at 16:00 (GMT 2) the head of the United States Federal Reserve, Jerome Powell, will give his speech in Congress, where the official will probably comment on the weak data on the labor market in terms of planned reduction in interest rates until the end of 2024. Recall that the market still expects the regulator one or two full reductions in the indicator by 25 basis points, starting from the September meeting. On Thursday at 14:30 (GMT 2), investors will focus on updated data on inflation for June: according to forecasts, the annual rate will slow down only from 3.3% to 3.1%, and in the month it will show a total growth of 0.1%, while the base value will likely be set at 0.2% and 3.4% on a monthly and annual basis, respectively. Germany will present similar statistics, but analysts do not expect significant changes, calculating that the annual rate will drop from 2.4% to 2.2%, the monthly value will remain at 0.1% and the harmonized one at 0.2%.

The risks of political instability in the context of the results of parliamentary elections in some countries in the region also put pressure on the position of the single currency. In particular, bidders are now evaluating the results of the vote in France, where the second round results were won by the parties in the "New Popular Front" coalition, while the far-right conservative nationalist political party of Marine Le Pen, The National Union, which leads at the beginning of the race, took only third place, and the coalition of current President Emmanuel Macron managed to gain a foothold in second. However, the French Parliament, according to experts, seems divided, and the formation of a new government may arise problems: for example, on the eve of the current Prime Minister Gabriel Attal already submitted his resignation, but the French president refused to accept it. .

Meanwhile, Dutch central bank chief Klaas Noth believes the European Central Bank (ECB) will not cut interest rates this month, but said the September meeting will be more "open" and allow for necessary adjustments. The official highlighted the effectiveness of the measures already implemented to contain inflation and said that the 2.0% target will be reached by the end of 2025. At the same time, a longer than expected period of movement in the area will mean a slow reduction in the deposit rate of 3.75%, which is still high enough to limit economic growth. Markets are generally estimating between one and two borrowing cost changes this year and a little over four over the next eighteen months, suggesting the deposit rate will remain above 3.00% in the second half. of 2025.

Support and resistance levels

On the daily chart, Bollinger bands show strong growth: the price range expands from above, freeing the "bulls" the way to new local highs. The MACD maintains a strong buy signal, standing above the signal line, and the Stochastic, approaching the maximum marks, tries to turn downwards, indicating strong risks of overbought of the single currency in the ultra short term .

Resistance levels: 1.0844, 1.0863, 1.0900, 1.0930.

Support levels: 1.0820, 1.0800, 1.0765, 1.0730.

Business scenarios

Long positions can be opened after a safe breakout of the level of 1.0844 with the target at 1.0900. Stop-loss — 1.0820. Implementation period: 2−3 days.

A bounce from the 1.0844 level as resistance followed by a breakout of the 1.0820 mark may be a signal to open short positions with the target of 1.0765. Stop-loss — 1.0844.