EUR/USD selling has stopped slightly ahead of the next ECB minutes.

Bearish view

  • Sell ​​the EUR/USD pair and set a take-profit at 0.9850.
  • Add a stop-loss at 1.0025.
  • Deadline: 1 day.

Bullish view

  • Set a buy-stop at 1.0010 and a take-profit at 1.0100.
  • Add a stop-loss at 0.9925.

EUR/USD price moved sideways on Thursday morning as investors waited for the next few minutes from the European Central Bank (ECB). The pair was trading at 0.9962, which was slightly above this week’s low at 0.9900.

ECB Minutes, US GDP and Jackson Hole

EUR/USD selling has stopped slightly ahead of the next ECB minutes. These minutes will provide more color on the deliberations that took place within the committee during the July meeting. In it, members decided to raise interest rates for the first time in 11 years. It rose 0.50% and hinted that more increases were to come.

Therefore, the minutes will shed more light on whether the committee expects rates to continue to rise even as the economic crisis intensifies. In addition to high inflation, Europe faces additional challenges like a prolonged drought that has resulted in significantly low water levels in major rivers. At the same time, the bloc risks rationing power in the winter.

The EUR/USD price will react to the latest data on German GDP and business sentiment. Based on the first estimate, analysts expect the German economy to grow 1.5% year-on-year in the second quarter. The country is under intense pressure due to its dependence on German natural resources.

Meanwhile, analysts expect data from the IFO Institute to show business sentiment, current valuation and expectations fell sharply in August. This will be in line with the relatively weak manufacturing and services PMI numbers that were released on Tuesday.

In the United States, the main event will be the Jackson Hole Symposium where central bank officials will have the opportunity to reset expectations. Jerome Powell’s speech will be the key event. Christine Lagarde will not attend the event.

The second reading of the US GDP data will not have a significant impact on the pair unless there is a major change. Data released in July showed the economy slipped into a recession in the second quarter, as it contracted 0.8%.


EUR/USD Forecast

The EUR/USD pair has seen a strong downtrend over the past few weeks. It has moved from this month’s high of 1.0368 to below the parity level. On the four-hour chart, it fell below the important support at 1.0095 and the 25- and 50-day moving averages,

It has also formed what looks like a bearish consolidation pattern. Therefore, the pair will likely resume the downtrend and retest the key support at 0.9850.

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