Technical analysis shows the EUR/USD is bearish, with the RSI indicating a potential short-term bullish retracement before further declines.
Key Points
- The EUR/USD pair saw a 0.25% increase on Monday but reversed to a -0.26% drop on Tuesday.
- September has historically been a challenging month for the euro, with a consistent pattern of decline.
- Political instability in Europe, particularly in Germany, poses long-term risks to the euro.
EUR/USD Daily Price Analysis – 03/09/2024
EUR/USD made a 0.25% increase on Monday. However, as trading progressed on Tuesday, the pair reversed its course, opening at 1.10702 and declining to 1.10437, resulting in a -0.26% drop.
September has historically been a challenging month for the euro. Since 2000, the EUR/USD has declined in 14 out of 24 Septembers, including each of the last five years. While seasonality alone is not a definitive indicator, when combined with the current economic backdrop—particularly the strong dollar and looming U.S. rate cuts—it suggests a continued downside risk for the euro.
Although the euro was little moved by the recent gains of the far-right in German state elections, the underlying political instability in Europe could pose longer-term risks. The ruling coalition in Germany appears increasingly fragile, and the upcoming EU budget season is expected to be turbulent.
Political uncertainties have historically weighed on the euro, and any significant developments could exacerbate the currency’s current weakness. While the immediate market reaction has been muted, the broader implications of European political dynamics should not be underestimated.
Key Economic Data and News to Be Released Today
In addition to today’s ISM Manufacturing PMI, the market is closely watching several other high-impact economic reports. Thursday will bring the ADP Non-Farm Employment Change, Unemployment Claims, and ISM Services PMI, each of which will provide valuable insights into the U.S. labor market and economic health. However, the most significant report will be Friday’s Non-Farm Payrolls (NFP).
A strong NFP report could reinforce expectations of a moderate rate cut, maintaining pressure on the euro. Conversely, a weaker NFP could increase speculation of a more aggressive rate cut, potentially offering some relief to the EUR/USD pair.
EUR/USD Technical Analysis – 03/09/2024
Technical analysis shows that the Fiber is currently bearish. Looking at the chart below, one could easily see how the price is trending below the 200 EMA while also breaking below support levels.
Another thing worth noting is the RSI. Currently, the RSI suggests that EUR/USD is oversold, hence we can begin to anticipate a bullish push lurking around the corner. However, rather than expect a full-blown bullish reversal, we may experience a brief bullish retracement or consolidation before price continues to tank.
EUR/USD Fibonacci Key Price Levels 03/09/2024
Short-term traders planning to invest in EUR/USD today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 1.10505 | 1.10776 |
| 1.10422 | 1.10859 |
| 1.10287 | 1.10995 |
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
