Potential signal:

• I am a buyer of this pair if we get anywhere near the 200 yen level. 
• The stop loss would have to be at the 199 yen level.
• I would aim for the 206 yen area.

The pound has fallen a bit against the Japanese yen, as we have seen a bit of a risk off type of attitude around the world. With that being said, it is worth noting that we are currently threatening the 50 day EMA. But underneath there we have an even more important area in the form of the ¥200 level. This area is one that I find very important at this point in time.

The ¥200 level, of course, will have a lot of psychology attached to it, and therefore I think it will attract a lot of inflows. The ¥200 level was where the Bank of Japan had intervened in the market previously, and therefore, one would think that a lot of people will be interested in seeing how that plays out. Either way, this is a situation where I’m looking to buy dips in as the market continues to pay you for hanging on to the British pound against the Japanese yen.

The Interest Rate Differential Continues to Influence the Long-Term

The interest rate differential between the two currencies remains very wide, and the Bank of Japan is essentially stuck with the problem of massive debt that Japan simply cannot finance at higher levels of interest. With that being the case, it should remain a scenario where traders look at this through the prism of trying to get paid at the end of every day via the swap. The swap is something that a lot of traders make the mistake of ignoring over the longer term.

Ultimately, I do think that’s how we approach this market in the longer term. And with that being said, I do think that this will offer an opportunity for people to take advantage of cheap pounds. This environment is one that prefers a little bit of value hunting. We had shot straight up in the air. We have pulled back a little bit. All of this is natural. I don’t think anything has changed.

Start trading our daily Forex signals. Get our most recommended Forex brokers list here.

• GBP/USD stays on the back foot despite upbeat UK PMI data.
• The risk-averse market atmosphere helps the US Dollar hold its ground.
• Investors await S&P Global PMI data from the US.

After closing in negative territory on Tuesday, GBP/USD continued to edge lower and touched its lowest level since July 11 below 1.2880. Although the pair managed to edge higher in the European session, it seems to be having a difficult time gathering recovery momentum.

The data from the UK showed that the S&P Global/CIPS Composite PMI improved to 52.7 in July’s flash estimate from 52.3 in June, highlighting an ongoing expansion in the private sector’s business activity at an accelerating pace. 

Assessing the survey’s findings, “policymakers will likely take a cautious approach to loosening policy amid signs of inflationary pressures pivoting away from services towards manufacturing, where Red Sea shipping delays and higher freight prices are adding to costs again,” said Chris Williamson Chief Business Economist at S&P Global Market Intelligence. “The renewed hiring trend could also add to pay pressures, sustaining some stickiness of inflation in the coming months.”

Despite the upbeat UK PMI data, the risk-averse market atmosphere doesn’t allow GBP/USD to regain its traction. At the time of press, UK’s FTSE 100 Index was down nearly 0.5% on the day and US stock index futures were losing between 0.5% and 0.9%.

Later in the day, S&P Global will release July PMI data for the US. Unless either of the Manufacturing or the Services PMI unexpectedly falls below 50, the US Dollar could preserve its strength and continue to cap the pair’s upside, given the negative shift seen in risk mood.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declines toward 30, reflecting a buildup of bearish momentum. On the downside, 1.2875-1.2870 (100-period Simple Moving Average (SMA), Fibonacci 38.2% retracement of the latest uptrend) aligns as immediate support before 1.2830 (Fibonacci 50% retracement) and 1.2800 (psychological level, static level).

1.2900 (psychological level, static level) could be seen as first resistance before 1.2940-1.2950 (Fibonacci 23.6% retracement, 50-period SMA). 

 

• GBP/USD stays on the back foot despite upbeat UK PMI data.
• The risk-averse market atmosphere helps the US Dollar hold its ground.
• Investors await S&P Global PMI data from the US.

After closing in negative territory on Tuesday, GBP/USD continued to edge lower and touched its lowest level since July 11 below 1.2880. Although the pair managed to edge higher in the European session, it seems to be having a difficult time gathering recovery momentum.

The data from the UK showed that the S&P Global/CIPS Composite PMI improved to 52.7 in July’s flash estimate from 52.3 in June, highlighting an ongoing expansion in the private sector’s business activity at an accelerating pace. 

Assessing the survey’s findings, “policymakers will likely take a cautious approach to loosening policy amid signs of inflationary pressures pivoting away from services towards manufacturing, where Red Sea shipping delays and higher freight prices are adding to costs again,” said Chris Williamson Chief Business Economist at S&P Global Market Intelligence. “The renewed hiring trend could also add to pay pressures, sustaining some stickiness of inflation in the coming months.”

Despite the upbeat UK PMI data, the risk-averse market atmosphere doesn’t allow GBP/USD to regain its traction. At the time of press, UK’s FTSE 100 Index was down nearly 0.5% on the day and US stock index futures were losing between 0.5% and 0.9%.

Later in the day, S&P Global will release July PMI data for the US. Unless either of the Manufacturing or the Services PMI unexpectedly falls below 50, the US Dollar could preserve its strength and continue to cap the pair’s upside, given the negative shift seen in risk mood.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declines toward 30, reflecting a buildup of bearish momentum. On the downside, 1.2875-1.2870 (100-period Simple Moving Average (SMA), Fibonacci 38.2% retracement of the latest uptrend) aligns as immediate support before 1.2830 (Fibonacci 50% retracement) and 1.2800 (psychological level, static level).

1.2900 (psychological level, static level) could be seen as first resistance before 1.2940-1.2950 (Fibonacci 23.6% retracement, 50-period SMA). 

 

• We have seen a significant amount of selling pressure in the US dollar against the Japanese yen.
• At this point in time, we are watching the ¥155 level very closely as it is a large, round, psychologically significant figure, but it is also an area where we have seen a lot of support previously.
• In other words, I think that a lot of people will be interested in this pair near this region. With this, I suspect we are trying to set up some kind of trade in the near future.

With that being said, I do think at this point in time, buyers will continue to jump in and try to take advantage of cheap US dollars. A breakdown below the ¥155 level could open up further selling, perhaps pushing this pair down to the ¥152 level, an area that has been important from both a support and a resistance barrier multiple times in the past. It also features the 200 day EMA. So that, of course, is an indicator that a lot of people will pay attention to them. Ultimately, I think this is still a market looking to buy dips, and due to the interest rate differential between the United States and Japan, which shows no real hint of shrinking significantly, as the two economies are in totally different places.

You Get Paid Over the Long Run

In other words, you will continue to get paid to hang on to this USD/JPY pair at this point. If we were to turn around and break above the 50 day EMA, which is just above the last couple of daily candlesticks, then we could open up the possibility of a move to the ¥160 level.

It has been a significant pullback over the last couple of weeks, but the reality is that we are still very much in an uptrend, and therefore, I think we’ve got a situation where buyers continue to jump in and take advantage of the cheap greenback. Every time we see a little selling.

Ready to start trading USD/JPY analysis? Get our list for top brokers in Japan here.

(MENAFN– Daily Forex)

At the start of this week’s trading, the GBP/USD exchange rate rebounded above 1.2920 after reaching a one-year high of over 1.30 last week.

The US dollar weakened amid President Joe Biden’s decision to withdraw from the 2024 elections.

Last week’s economic calendar showed that UK retail sales fell by 1.2% in June, more than the expected 0.4% decline, increasing the likelihood of a rate cut in August.

This decline follows slower wage growth and inflation reaching the bank of England’s (BoE) target of 2%. Investors are now focused on upcoming PMI figures, which are expected to show faster expansion in manufacturing and services for July. Additionally, the CBI factory orders measure is expected to reach its highest level in a year.In the United States, there are growing expectations that the Federal Reserve will cut interest rates in September.According to electronic trading platforms, the yield on the British 10-year government bond was little changed at a one-week high. According to trading, the yield on the British 10-year government bond reached its highest level in one week at 4.13%, affected by the expectations of the monetary policy of central banks and the news that US President Joe Biden will not run for re-election, and instead endorses Vice President Kamala Harris.Last week, British retail sales fell by 1.2% in June, more than the expected 0.4% decline, increasing the chances of an interest rate cut in August. This decline in retail sales comes on the heels of slowing wage growth and inflation reaching the Bank of England’s 2% target. Now, investors are looking forward to the purchasing managers’ indices (PMI), which are expected to show a faster expansion in manufacturing and services for July, and the CBI factory orders gauge is expected to reach a one-year high.In the United States, there are growing expectations that the Federal Reserve will cut US interest rates in September.According to Forex trading, the pound reached a high above 1.30 against the US dollar last week, but a pullback in equity markets has halted the rally. This week we will be watching the market’s reaction to US political developments for guidance. According to trading, the GBP/USD exchange rate peaked at the 1.3044 resistance level but has since retreated to 1.2912 and appears to be still under short-term pressure.In last week’s forecast, we mentioned that the GBP/USD seemed overbought and needed correction. This has occurred, and the exchange rate appears more balanced as of Monday. Despite the recent pullback, the GBP remains expensive against the USD according to average forecasts from over 30 investment banks, trading above their targets for September and year-end.Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Technical forecasts for the GBP/USD pair today:According to the performance on the daily chart attached and according to recent trades, the GBP/USD price is in a neutral position. As we mentioned before, the psychological resistance of 1.3000 will remain the most important for the bulls’ control over the trend. On the other hand, and for the same time period, the support level of 1.2820 will remain a threat to the rebound path to the latter. Technically, the GBP/USD price will remain subject to the policy directions of global central banks and investor sentiment towards risk appetite or not. Finally, we still prefer to sell GBP/USD from every upward level.Want to start trading the daily GBP/USD forecasts? Get our top Forex brokers in the UK here.MENAFN23072024000131011023ID1108475329

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.

Previously, Bank of Japan Deputy Governor Ryozo Himino highlighted the weak Yen’s impact on the economy, stating,

“Exchange-rate fluctuations affect economic activity in various ways. It also affects inflation in a broad-based and sustained way, beyond the direct impact on import prices.”

Expert Views

Economists also highlighted the effects of the weak Yen. S&P Global Market Intelligence Associate Director Jinyi Pan recently observed the impact of the weak Yen on the private sector, saying,

“More concerning, however, is the pressure on margins for Japanese firms. Average input costs rose at the fastest pace in over a year while output price inflation softened in June, particularly in the service sector. Anecdotal evidence suggested that the effects of a weak Yen and rising labor costs brought up cost inflation.”

Some economists believe reducing JGB purchases would address the Yen’s weakness more sustainably.

Nataxis Asia Pacific Chief Economist Alicia Garcia Herrero recently commented on JGB purchases, stating,

“Bank of Japan to start quantitative tightening, which could support the Yen more than intervention.”

Speculation about a July BoJ rate hike and JGB purchases cut could signal a USD/JPY drop toward 150.

US Economic Indicators: Services PMI

On Wednesday, the US Services PMI will also draw investor interest.

Economists forecast the S&P Global Services PMI to fall from 55.3 in June to 54.4 in July.

A lower-than-expected services PMI could raise expectations of multiple 2024 Fed rate cuts. The services sector contributes over 70% to the US economy and is the main source of inflation.

Slower service sector activity may impact employment trends and wage growth. Lower wages could reduce disposable income and consumer spending. A pullback in consumer spending may dampen demand-driven inflation.

Investors should consider the sub-components, including input prices and employment. Input prices reflect the effects of wage growth on inflation.

Rising bets on multiple 2024 Fed rate cuts could signal a USD/JPY move toward 150.

Short-term Forecast: Bearish

USD/JPY trends hinge on the July services PMIs, Tokyo inflation (Fri), and the US Personal Income and Outlays Report (Fri). Higher-than-expected Services PMI and inflation numbers from Japan could drive bets on a July BoJ rate hike and a cut to JGB purchases.

Conversely, weaker US Services PMI and inflation numbers could raise expectations of September and December Fed rate cuts.

Narrower interest rate differentials, stemming from monetary policy divergence, could support a USD/JPY drop below 150.

Investors should remain alert. Monitor real-time data, central bank commentary, and expert commentary to adjust your trading strategies accordingly. Stay updated with our latest news and analysis to manage USD/JPY volatility.

USD/JPY Price Action

Daily Chart

The USD/JPY remained below the 50-day EMA while holding comfortably above the 200-day EMA. The EMAs affirmed the bearish near-term but bullish longer-term price signals.

A USD/JPY return to 156 could support a move toward the 50-day EMA. A breakout from the 50-day EMA could give the bulls a run at 160.

Services PMIs and Bank of Japan commentary require consideration on Wednesday.

Conversely, a drop below the 155 handle could bring the 200-day EMA and the 151.685 support level into play.

The 14-day RSI at 34.91 suggests a USD/JPY break below 155 before entering oversold territory.

• EUR/USD dropped to multi-day lows near 1.0840.
• The Dollar regained upside traction despite lower yields.
• The ECB’s de Guindos opened the door to a rate cut in September.

The US Dollar (USD) edged modestly higher on turnaround Tuesday, lifting the USD Index (DXY) to the mid-104.00s in spite of a corrective decline in US and German yields.

That said, EUR/USD resumed its downtrend, quickly leaving behind Monday’s small gains and instead exposing further losses well south of the 1.0900 barrier in a context of dominant risk-off sentiment.

Around the Fed, a September interest rate cut appears fully anticipated, with investors also expecting another reduction in December. Against that, market participants could now start shifting their attention to the US political arena, particularly after current Vice President K. Harris gathers more than enough support to face Republican candidate D. Trump at the November 5 elections.

Closer to home, the ECB’s Vice President Luis de Guindos suggested a possible interest rate cut in September, noting that the ECB’s new projections would be the “most important” factor in determining whether inflation is returning to target.

Furthermore, the Eurozone’s economic recovery prospects and signs of cooling in key US economic indicators may lessen the current monetary policy gap between the Fed and the ECB, occasionally supporting EUR/USD. This view has gained support amid increasing expectations of Fed rate cuts.

Looking ahead, key US GDP figures, advanced PMIs globally, and US PCE data are expected to shape market sentiment in the coming days.

EUR/USD daily chart

EUR/USD short-term technical outlook

EUR/USD is expected to face the next downward stop at the key 200-day SMA of 1.0815 before sliding to its June low of 1.0666 (June 26). The loss of the May low of 1.0649 (May 1) leads to the 2024 bottom of 1.0601 (April 16).

On the other hand, the initial up-barrier emerges at the July top of 1.0948 (July 17), followed by the March peak of 1.0981 (March 8) and the key 1.1000 milestone.

Looking at the larger picture, the constructive bias should remain in play if the pair maintains its position above the critical 200-day SMA.

So far, the four-hour chart shows that the downtrend has picked up pace. That said, the initial resistance is 1.0948, which precedes 1.0981 and 1.1000. On the opposite side, 1.0843 comes first, seconded by the 200-SMA at 1.0793 and lastly 1.0709. The relative strength index (RSI) dropped to about 33.

• EUR/USD dropped to multi-day lows near 1.0840.
• The Dollar regained upside traction despite lower yields.
• The ECB’s de Guindos opened the door to a rate cut in September.

The US Dollar (USD) edged modestly higher on turnaround Tuesday, lifting the USD Index (DXY) to the mid-104.00s in spite of a corrective decline in US and German yields.

That said, EUR/USD resumed its downtrend, quickly leaving behind Monday’s small gains and instead exposing further losses well south of the 1.0900 barrier in a context of dominant risk-off sentiment.

Around the Fed, a September interest rate cut appears fully anticipated, with investors also expecting another reduction in December. Against that, market participants could now start shifting their attention to the US political arena, particularly after current Vice President K. Harris gathers more than enough support to face Republican candidate D. Trump at the November 5 elections.

Closer to home, the ECB’s Vice President Luis de Guindos suggested a possible interest rate cut in September, noting that the ECB’s new projections would be the “most important” factor in determining whether inflation is returning to target.

Furthermore, the Eurozone’s economic recovery prospects and signs of cooling in key US economic indicators may lessen the current monetary policy gap between the Fed and the ECB, occasionally supporting EUR/USD. This view has gained support amid increasing expectations of Fed rate cuts.

Looking ahead, key US GDP figures, advanced PMIs globally, and US PCE data are expected to shape market sentiment in the coming days.

EUR/USD daily chart

EUR/USD short-term technical outlook

EUR/USD is expected to face the next downward stop at the key 200-day SMA of 1.0815 before sliding to its June low of 1.0666 (June 26). The loss of the May low of 1.0649 (May 1) leads to the 2024 bottom of 1.0601 (April 16).

On the other hand, the initial up-barrier emerges at the July top of 1.0948 (July 17), followed by the March peak of 1.0981 (March 8) and the key 1.1000 milestone.

Looking at the larger picture, the constructive bias should remain in play if the pair maintains its position above the critical 200-day SMA.

So far, the four-hour chart shows that the downtrend has picked up pace. That said, the initial resistance is 1.0948, which precedes 1.0981 and 1.1000. On the opposite side, 1.0843 comes first, seconded by the 200-SMA at 1.0793 and lastly 1.0709. The relative strength index (RSI) dropped to about 33.

• At the start of this week’s trading, the GBP/USD exchange rate rebounded above 1.2920 after reaching a one-year high of over 1.30 last week.
• The US dollar weakened amid President Joe Biden’s decision to withdraw from the 2024 elections.
• Last week’s economic calendar showed that UK retail sales fell by 1.2% in June, more than the expected 0.4% decline, increasing the likelihood of a rate cut in August.

This decline follows slower wage growth and inflation reaching the Bank of England’s (BoE) target of 2%. Investors are now focused on upcoming PMI figures, which are expected to show faster expansion in manufacturing and services for July. Additionally, the CBI factory orders measure is expected to reach its highest level in a year.

In the United States, there are growing expectations that the Federal Reserve will cut interest rates in September.

According to electronic trading platforms, the yield on the British 10-year government bond was little changed at a one-week high. According to trading, the yield on the British 10-year government bond reached its highest level in one week at 4.13%, affected by the expectations of the monetary policy of central banks and the news that US President Joe Biden will not run for re-election, and instead endorses Vice President Kamala Harris.

Last week, British retail sales fell by 1.2% in June, more than the expected 0.4% decline, increasing the chances of an interest rate cut in August. This decline in retail sales comes on the heels of slowing wage growth and inflation reaching the Bank of England’s 2% target. Now, investors are looking forward to the purchasing managers’ indices (PMI), which are expected to show a faster expansion in manufacturing and services for July, and the CBI factory orders gauge is expected to reach a one-year high.

In the United States, there are growing expectations that the Federal Reserve will cut US interest rates in September.

According to Forex trading, the pound reached a high above 1.30 against the US dollar last week, but a pullback in equity markets has halted the rally. This week we will be watching the market’s reaction to US political developments for guidance. According to trading, the GBP/USD exchange rate peaked at the 1.3044 resistance level but has since retreated to 1.2912 and appears to be still under short-term pressure.

In last week’s forecast, we mentioned that the GBP/USD seemed overbought and needed correction. This has occurred, and the exchange rate appears more balanced as of Monday. Despite the recent pullback, the GBP remains expensive against the USD according to average forecasts from over 30 investment banks, trading above their targets for September and year-end.

Technical forecasts for the GBP/USD pair today:

According to the performance on the daily chart attached and according to recent trades, the GBP/USD price is in a neutral position. As we mentioned before, the psychological resistance of 1.3000 will remain the most important for the bulls’ control over the trend. On the other hand, and for the same time period, the support level of 1.2820 will remain a threat to the rebound path to the latter. Technically, the GBP/USD price will remain subject to the policy directions of global central banks and investor sentiment towards risk appetite or not. Finally, we still prefer to sell GBP/USD from every upward level.

Want to start trading the daily GBP/USD forecasts? Get our top Forex brokers in the UK here.

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back just a bit against the Japanese yen during trading on Tuesday in the early hours. However, we still have a significant amount of support underneath and I think that probably is what people will be paying more attention to than anything else. With that being said, as long as the 155 yen level is below current pricing, I do think there are plenty of buyers. Even if we were to break down below there, I still think there’s plenty of support near the 152 yen level, but I don’t foresee us breaking down that much, at least not right away.

If we can recapture the 50-day EMA above, I think that’s a strong sign that we are heading back towards the 160 yen level. The interest rate differential continues to favor the US dollar. And at the end of the day, that’s one of your big drivers here. The Bank of Japan simply cannot tighten monetary policy, at least not in any significant amount, due to the massive debts that the Japanese currently face. So, at this point in time, the best they can do is occasionally intervene and slow the destruction of the Japanese yen. As things stand right now, without some type of massive move by the Federal Reserve, I still think you’re looking at a pair that goes higher over the longer term, but it will be choppy from time to time.

EUR/USD Current price: 1.0858

• Financial markets are cautiously optimistic ahead of big names earning reports.
• United States’ upcoming first-tier data exacerbates the cautious stance.
• EUR/USD poised to extend its slide, near-term support at 1.0820.

The US Dollar keeps grinding higher on Tuesday, resulting in EUR/USD falling to a fresh two-week low in the 1.0850 price zone. The Greenback benefits from a cautious mood ahead of earnings reports. Multiple S&P500 big names will report results this week, and investors eagerly await the outcome before compromising with a particular position. Stock markets trade mixed ahead of Wall Street’s opening, yet overall, it seems markets retain a certain dose of optimism after current United States (US) President Joe Biden stepped down from the presidential race. The news boosted the USD amid hopes Donald Trump could win and apply more market-friendly measures.

Meanwhile, European Central Bank (ECB) Vice President Luis de Guindos hit the wires. De Guindos said that while the level of uncertainty is “huge,” inflation is “practically” in line with policymakers’ projections. Furthermore, he added that September would be a much more convenient month for making decisions as officials will have more data.

The macroeconomic calendar remains scarce, with first-tier US figures scheduled for later in the week, exacerbating the quietness. The country will release the first estimate of the Q2 Gross Domestic Product (GDP) and fresh Personal Consumption Expenditures (PCE) Price Index data.

After the US opening, the Eurozone will publish the preliminary estimate of July Consumer Confidence, while the US will release June Existing Home Sales and the Richmond Fed Manufacturing Index for July.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of extending its slide. The pair keeps trading above all its moving averages, but technical indicators maintain their firmly downward slopes, approaching their midlines from above. Regarding moving averages, the 20 Simple Moving Average (SMA) advances above directionless 100 and 200 SMAs, but with its bullish strength moderating, suggesting buyers are not sure of adding on dips.

In the near term, and according to the 4-hour chart, the risk skews to the downside. Technical indicators resumed their slides after failing to regain positive levels, heading sharply lower below their midlines. At the same time, a bearish 20 SMA provides intraday resistance in the 1.0870 price zone, while EUR/USD approaches a bullish 100 SMA, acting as dynamic support at around 1.0820. Once below the latter, the bearish case will likely gain strength.

Support levels: 1.0820 1.0770 1.0725

Resistance levels: 1.0870 1.0910 1.0945  

EUR/USD Current price: 1.0858

• Financial markets are cautiously optimistic ahead of big names earning reports.
• United States’ upcoming first-tier data exacerbates the cautious stance.
• EUR/USD poised to extend its slide, near-term support at 1.0820.

The US Dollar keeps grinding higher on Tuesday, resulting in EUR/USD falling to a fresh two-week low in the 1.0850 price zone. The Greenback benefits from a cautious mood ahead of earnings reports. Multiple S&P500 big names will report results this week, and investors eagerly await the outcome before compromising with a particular position. Stock markets trade mixed ahead of Wall Street’s opening, yet overall, it seems markets retain a certain dose of optimism after current United States (US) President Joe Biden stepped down from the presidential race. The news boosted the USD amid hopes Donald Trump could win and apply more market-friendly measures.

Meanwhile, European Central Bank (ECB) Vice President Luis de Guindos hit the wires. De Guindos said that while the level of uncertainty is “huge,” inflation is “practically” in line with policymakers’ projections. Furthermore, he added that September would be a much more convenient month for making decisions as officials will have more data.

The macroeconomic calendar remains scarce, with first-tier US figures scheduled for later in the week, exacerbating the quietness. The country will release the first estimate of the Q2 Gross Domestic Product (GDP) and fresh Personal Consumption Expenditures (PCE) Price Index data.

After the US opening, the Eurozone will publish the preliminary estimate of July Consumer Confidence, while the US will release June Existing Home Sales and the Richmond Fed Manufacturing Index for July.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is at risk of extending its slide. The pair keeps trading above all its moving averages, but technical indicators maintain their firmly downward slopes, approaching their midlines from above. Regarding moving averages, the 20 Simple Moving Average (SMA) advances above directionless 100 and 200 SMAs, but with its bullish strength moderating, suggesting buyers are not sure of adding on dips.

In the near term, and according to the 4-hour chart, the risk skews to the downside. Technical indicators resumed their slides after failing to regain positive levels, heading sharply lower below their midlines. At the same time, a bearish 20 SMA provides intraday resistance in the 1.0870 price zone, while EUR/USD approaches a bullish 100 SMA, acting as dynamic support at around 1.0820. Once below the latter, the bearish case will likely gain strength.

Support levels: 1.0820 1.0770 1.0725

Resistance levels: 1.0870 1.0910 1.0945