The pair will likely remain in this range as traders wait for the upcoming US consumer and producer inflation data.

Bearish View

• Sell the EUR/USD pair and set a take-profit at 1.0100.
• Add a stop-loss at 1.0250.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.0235 and a take-profit at 1.0300.
• Add a stop-loss at 1.0160.

The EUR/USD price moved sideways during the American and Asian sessions as investors focused on the latest spending package by the Senate. The pair was trading at 1.0188, where it has been in the past few days.

EU Energy Crisis

The EUR/USD pair moved sideways after the American Senate voted for Joe Biden’s climate, tax, and healthcare bill. The bill will provide billions of dollars in funding for clean energy projects like wind and solar.

It will also lower some drug prices by letting Medicare negotiate with manufacturers. Most importantly, the bill will be funded by introducing a 15% minimum tax for companies making over $1 billion in sales every year. Also, it aims to raise billions by introducing a 1% tax on share buybacks.

The pair also moved sideways as more Federal Reserve officials warned that the bank will continue hiking interest rates in a bid to fight inflation. In a statement, Mary Daly warned that the bank will continue hiking interest rates in the coming months.

There is no major economic data scheduled from the United States and Europe on Tuesday. Therefore, investors will focus on the upcoming US inflation data scheduled for Wednesday. Economists expect the data to show that the country’s inflation retreated slightly in July this year as gas prices declined.

Another thing to watch will be the ongoing European energy crisis. Russia has slashed gas supplies to Europe to about 20% of capacity and analysts believe that the situation will worsen towards summer.

The situation will likely get worse as the hotter-than-usual summer continues. In a statement on Monday, Norway’s government warned that it could stop selling electricity to European countries soon. The government said that the country’s hydropower plants were having extremely low levels of water. This could hurt European countries like Germany and Denmark.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair has been moving sideways recently. As a result, it is consolidating along the 25-day and 50-day moving averages. It is also between the important support and resistance point at 1.0131 and 1.0276. It is also between the 23.6% and 38.6% Fibonacci Retracement level.

Therefore, the pair will likely remain in this range as traders wait for the upcoming US consumer and producer inflation data. In the near term, however, the pair will likely have a bearish breakout as sellers target parity.

Ready to trade our free daily Forex trading signals? We’ve shortlisted the best Forex trading brokers in the industry for you.

The pair will likely remain in the current range and then have a bearish breakout after the US jobs data.

Bearish View

• Set a sell-stop at 1.0130 and a take-profit at 1.0045.
• Add a stop-loss at 1.0235.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.0225 and a take-profit at 1.0300.
• Add a stop-loss at 1.0125.

The EUR/USD currency pair came under intense pressure after the strong American jobs numbers pointed to more tightening by the Federal Reserve. The pair dropped to a low of 1.0160, which was slightly below last week’s high of 1.0300.

More Fed Tightening Likely

The EUR/USD pair made a strong bearish breakout as investors reflected on the latest US non-farm payroll data. According to the Bureau of Labor Statistics (BLS), the economy added over 528k jobs in July, a strong surprise since analysts were expecting it to add just 225k jobs. It was also better than the adjusted 392k jobs that were created in June.

Additional data revealed that the unemployment rate dropped from 3.6% to 3.5% in July. This decline was equally better than what analysts were expecting. Further, the labor participation rate and wages continued rising. These numbers imply that the American economy took two years to recover the 22 million jobs it lost during the pandemic.

Therefore, these numbers imply that the Federal Reserve will likely continue with its rate hike campaign to defeat the soaring inflation. Data published in July showed that America’s inflation rose to a multi-decade high of 9.1% in June.

The next major catalyst for the pair will be the upcoming US inflation numbers scheduled for Wednesday. Economists expect the data to show that the country’s inflation fell from 9.1% to 8.7% on a year-on-year basis. They also believe that it dropped from 1.3% to 0.2% on a month-on-month basis as the price of gasoline dropped. Still, inflation remains significantly above the bank’s target of 2.0%.

There is no major scheduled economic data from Europe this week. Therefore, focus will remain on the US dollar as global risks rise. The war in Ukraine is going on while China has ramped pressure on Taiwan.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair has remained between the important support and resistance levels at 1.0100 and 1.0296 in the past few weeks. It dropped slightly after the latest US jobs data and moved slightly below the 25-day moving average.

At the same time, the pair remained above the 23.6% Fibonacci Retracement level. Notably, it has formed a small head and shoulders pattern. Therefore, the pair will likely remain in the current range and then have a bearish breakout after the US jobs data.

Ready to trade our daily Forex signals? Here’s a list of some of the best Forex trading platforms to check out.

This market will have to make a decision, but right now it looks as if we are simply trying to build up enough panic to drive through the parity level.

• The EUR/USD currency pair has rallied on Thursday to show signs of continuation in the same range that we have been in.
• The question now is whether or not we continue to see put downward pressure over the longer term, or if we see an attempt to turn things around.
• I don’t think that we are anywhere near changing the trend, and the fact that Friday is the Non-Farm Payroll announcement has not escaped my attention.

It’s All About the Federal Reserve

A lot of traders on Wall Street believe that the Federal Reserve is going to step away from monetary tightening much sooner than they had initially planned. Ultimately, this is a big game of “chicken”, as the Federal Reserve continues to say the same thing, while traders continue to pay no attention to them whatsoever. Sooner or later, somebody is going to have to blink.

On the other side of the Atlantic Ocean, we have the bog that is the European Union economy looking for a windshield. Because of this, the 1.01 level underneath could be a target, and at this point, if we were to break down below there it’s likely that the market could go to the parity level. The parity level course will attract a lot of attention, so if we were to break down below it, I think that would be a very negative turn of events, as it could open up and move down to the 0.90 level, perhaps even to the 0.96 level.

The 1.04 level seems to be a major resistance barrier, as it was a previous support level. “Market memory” comes into the picture in that area, so it’s worth paying close attention to. The market breaking above the 1.06 level would be a major trend change, but I don’t think that happens anytime soon. All things being equal, this is a market that I think given enough time will have to make a decision, but right now it looks as if we are simply trying to build up enough panic to drive through the parity level. If we cannot, we may have found the bottom, but I think that might be a bit of a stretch at this juncture, because it’s a market that features the European Union, which is one of the big disasters just waiting to happen.

Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.