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As the EUR/USD chart shows today, the euro has strengthened against the US dollar, climbing above the 1.1670 level, compared to the 1.1400 area at the beginning of the month.
Why Is EUR/USD Rising?
According to Reuters, the US dollar's weakness is being driven by:
→ Expectations of a Federal Reserve rate cut, which intensified following last week's disappointing US labour market data.
→ Anticipation of the upcoming US inflation report, scheduled for release on 12 August at 15:30 GMT+3.
On the other hand, the euro is being supported by growing optimism around a possible resolution of the military conflict in Ukraine, as well as the potential meeting between Donald Trump and Vladimir Putin.
Technical Analysis of the EUR/USD Chart
On 30 July, we noted that after hitting its July low, EUR/USD could stage a recovery — which indeed materialised. But does the chart now look bullish?
A definitive bullish outlook is hindered by the sequence of lower highs and lower lows (A-B-C-D), which continues to form a bearish market structure.
At the same time, the descending channel on the EUR/USD chart has become more pronounced. After a brief period of consolidation near the channel’s median line (marked with a circle), the price moved up towards the upper boundary of the channel. It is worth noting that a sharp decline occurred recently from these same levels (highlighted with an arrow), breaking through the blue support line.
Given these factors, it is reasonable to assume that bearish activity may intensify around current levels, potentially slowing further EUR/USD growth.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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