EURUSD dropped 2 cents from its August high but has since rebounded as sellers were unable to break below the crucial 1.10 support level. This level has proven to be a strong support zone, indicating considerable buying pressure. The moving averages (MAs) also provided support, particularly the 100 SMA on the 4-hourly chart, and price has consolidated around this area for several trading sessions.
It rebounded strongly from this level last week, reflecting renewed demand. EUR/USD Above 1.11. A strong uptrend from the 1.10 support zone is clearly visible on the short-term timeframe. However, the upward momentum hit a key resistance at the 1.1150 swing level, where sellers stepped in and rejected the price yesterday. For now, we expect the sellers to defend this level with a clear risk higher than the current level. If the price breaks through this, it could be a sign of further bullish momentum.
EUR/USD Chart H4 – Hesitation at Resistance
On the monetary policy front, the European Central Bank (ECB) cut interest rates by 25 basis points last week to counter a weakening euro zone economy. However, ECB officials stressed a gradual easing approach and referred further changes to the December meeting. Markets currently see a 70% chance of no further rate cuts in October, with a total of 40 basis points of easing expected by the end of the year. ECB members have consistently stated a data-driven approach, making consecutive rate cuts in September and October highly unlikely.
Eurozone final CPI inflation data for August
- Eurozone August final CPI: +2.2% YoY (Consensus preliminary figure: +2.2%)
- Eurozone August Core CPI: +2.8% YoY (same as the preliminary figure of +2.8%)
- Previous core CPI: +2.9% YoY
- Inflation is gradually easing in the euro area.
The final CPI and Core CPI figures for August were unchanged from initial estimates, confirming no revisions. This reflects the gradual pace of the deflation process observed in recent months, with the European Central Bank (ECB) remaining cautious. The ECB has indicated it will pause interest rate cuts in October, monitoring a potential rise in price pressures expected mainly due to base effects in the fourth quarter. The central bank is adopting a wait-and-see stance, carefully assessing the economic situation before taking further decisions on monetary policy.
EUR/USD Live Chart
EUR/USD
