The major European currencies held their ground near key levels on Thursday. Following Jerome Powell’s dovish remarks at the Jackson Hole symposium, the US dollar first fell sharply, then corrected higher on Monday, only to weaken again by midweek. Market reaction, however, remains uncertain: investors have yet to form a consensus on whether the dollar’s decline marks the continuation of a downtrend or if the current consolidation will develop into a new upward impulse for the greenback. Against this backdrop, the EUR/USD and USD/CHF pairs have once again tested important levels but managed to rebound, maintaining a balance between supply and demand.

Market participants are now focused on the upcoming data releases from Europe and the United States. In the euro area, figures on consumer and business sentiment, inflation expectations, and business climate indices are due, which could adjust short-term forecasts for the euro. In the US, attention will centre on labour market and price dynamics – jobless claims, the GDP deflator, and the Personal Consumption Expenditures (PCE) index will be key indicators for assessing the Federal Reserve’s future policy trajectory. These publications could determine whether EUR/USD and USD/CHF remain within their current ranges or if the market is preparing for new impulses.

EUR/USD

Yesterday, sellers of the single European currency attempted to break key support at 1.1600. The price set a new August low, but the breakout proved false, and the pair returned to 1.1640. Technical analysis of EUR/USD indicates sideways trading between 1.1580 and 1.1740. A significant fundamental driver would be required to push the pair beyond this range.

Factors that could influence the EUR/USD movement include:

• Today at 12:00 (GMT+3): Eurozone consumer and business confidence report
• Today at 14:30 (GMT+3): ECB monetary policy meeting minutes
• Tomorrow at 15:00 (GMT+3): Germany Consumer Price Index (CPI)

USD/CHF

The USD/CHF pair has been trading in a narrow range between 0.8000 and 0.8150 for several weeks. Following the Fed Chair’s dovish remarks, the price tested the lower boundary of this range, but no renewed downward momentum has been observed so far. Should positive US news emerge, the upper boundary of the sideways corridor at 0.8150 may be tested. A break below 0.8000 could trigger a decline towards 0.7910–0.7940.

Factors that could influence the USD/CHF movement include:

• Today at 15:30 (GMT+3): US GDP
• Today at 15:30 (GMT+3): US Initial Jobless Claims
• Tomorrow at 10:00 (GMT+3): Swiss KOF Leading Economic Indicator

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