Eurozone Inflation: Recent inflation data from the eurozone points toward expectations of an interest rate cut by the European Central Bank (ECB). This could weigh on the euro in the medium term, as lower interest rates generally reduce the currency's appeal by offering lower yields for investors.
US Economic Data: The August jobs report revealed weaker-than-expected growth in the private sector, with only 99,000 jobs added compared to the forecast of 145,000. This contributed to the US dollar’s weakness.
US Monetary Policy: Current market expectations suggest a 43% probability of a 50 basis point rate cut by the Federal Reserve. This factor weakens the dollar further, but a shift in sentiment based on economic data could reverse the trend.
Technical Analysis:
Resistance Levels: 1.1160 serves as the first key resistance level, followed by 1.1200, which marks the endpoint of the latest uptrend. If the rally continues, 1.1250 becomes the next target for buyers.
Support Levels: If EUR/USD falls below 1.1100, it could trigger bearish pressure. The next significant support lies at 1.1040 .
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