Usman Salis
The EUR/USD pair is walking a tightrope right now, clinging to the 1.1600 support level while everyone waits for the US inflation data to drop. It's one of those moments where the market feels like it's holding its breath – you can almost sense the tension building as traders position themselves for what could be a significant breakout in either direction.
EUR/USD Price Action: Dancing Around Key Support
Looking at the hourly chart, EUR/USD is playing a dangerous game just below the 1.1615 Fibonacci level. The currency pair is desperately trying to stay above that psychologically important 1.1600 mark, but the bears are clearly in control right now. If we see a clean break below the 1.1597-1.1589 zone, things could get ugly fast with the Point of Control at 1.1574 becoming the next target.
The technical picture isn't exactly screaming "buy" either. With the RSI sitting at 40.80, sellers are definitely calling the shots. The price is hugging the lower Bollinger Band, which typically means we're in for some serious volatility ahead. For the bulls to regain any meaningful control, they need to push this thing back above 1.1630 – and that's looking like a tall order right now.
Market Fundamentals Paint a Bearish EUR/USD Picture
Here's the thing that's really weighing on the euro – the fundamental backdrop just isn't supportive. The dollar is flexing its muscles ahead of the CPI release, and with an 89% chance of Fed rate cuts priced in for September, there's this weird dynamic where bad news for the US economy might actually be good news for the dollar in the short term.
Meanwhile, the ECB is basically sitting on the sidelines with no rate hikes expected, leaving the euro without any significant catalysts. Some analysts are getting nervous about a potential double top pattern forming, with that 50-day moving average near 1.18 acting like a brick wall for any meaningful recovery attempts. If we get a daily close below 1.1600, we could be looking at a slide toward 1.1400 – and that's not exactly what euro bulls want to hear right now.
Usman Salis
