EURUSD is moving in corrective channel

01 September 2023 185
EURUSD is moving in corrective channel

The U.S. dollar is strengthening against major currencies on Friday again. This is particularly evident in the EURUSD pair. The currency instrument shows a strong downtrend after the European consumer statistics data release.

Inflation rates in 20 eurozone countries ceased to slow down in August. According to Eurostat, the annual inflation rate amounted to 5.3% by the end of the summer. Against July, prices for some goods in August showed a slight decrease, but remained higher yer-on-year.

The current data-rich week will conclude with the U.S. Non-Farm Payrolls (NFP) report.

According to Tim Waterer, Chief Market Analyst at KCM Trade, the U.S. data were weak this week. If new Non-Farm Payrolls figures show a decline, Treasury bond yields will continue their recent fall.

The U.S. labor sector report is due to be released at 12:30 GMT. According to forecasts, the number of jobs in the non-farm sector should fall to 170,000 from the previous 187,000. Confirmation of these data may lead to a weaker U.S. dollar.

Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic on Thursday presented arguments against additional interest rate hikes by the central bank. He said monetary policy is already tight enough to bring inflation back to 2% within a reasonable amount of time.

Additional reasoning in favor of Fed monetary policy easing reduces interest in the U.S. currency.

EURUSD quotes are moving in a corrective channel on the D1 timeframe. In late August, the price rebounded from trend support, sending the pair towards trend resistance.

EURUSD is moving in corrective channel - Photo 1

In terms of wave analysis, the price is in the formation of the second descending wave on the H1 timeframe. The strength of trend support on the daily timeframe limits the pair's sales. Today's fundamental factors may create conditions for the second wave's transition into the third ascending wave.


The short-term outlook for the EURUSD pair suggests buying.

The target is at the level of 1.1000.

Part of the profit should be taken near 1.0900.

The Stop-loss is set at 1.0765.

Bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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