EUR/USD traded virtually unchanged on Thursday, consolidating after reaching a three-month high of 1.1711 earlier in the week. The pair is currently trading around 1.1651, with price action settling just above the 200-day Simple Moving Average (SMA) at 1.1632, which is seen as a key support level [1]. The market is awaiting Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole Symposium on Friday, which is identified as a key risk event that could influence the US Dollar and, consequently, the direction of EUR/USD [1].
Strategists at Brown Brothers Harriman highlight that the swaps curve has nearly fully priced in a 25 basis point European Central Bank (ECB) rate hike to 2.50% at the next September 10 meeting, as well as a total of 60 basis points of tightening over the next twelve months. They describe this policy path as 'reasonable and supportive of EUR,' citing above-target Eurozone inflation and leading indicators pointing to stronger economic activity as reinforcing the case for further ECB tightening [1].
From a technical standpoint, EUR/USD has maintained a steady uptrend since the start of the month, reclaiming the 50-day, 100-day, and 200-day SMAs, which are clustered between approximately 1.1480 and 1.1630. Momentum indicators such as the Relative Strength Index (RSI) have eased to around 65 after briefly entering overbought territory, while the Moving Average Convergence Divergence (MACD) remains positive, though the green histogram is fading. The Average Directional Index (ADX) above 40 signals a strong underlying trend [1].
Immediate resistance is noted at the 1.1700 psychological mark, followed by 1.1800, while initial support lies at the 200-day SMA around 1.1633, then the 100-day SMA near 1.1574, and the 50-day SMA around 1.1484. A deeper pullback could expose the 1.1350 area [1].
CONCLUSION
EUR/USD remains supported above the 200-day SMA, with ECB tightening expectations and positive economic indicators underpinning the Euro. Market participants are closely watching the upcoming Fed Chair speech for further direction. Technicals suggest a strong trend, though momentum is showing early signs of cooling.