The EUR/USD pair faced a sharp rejection from the 1.1200 level on Wednesday, sliding back into familiar territory just above 1.1100. After briefly touching a 14-month high, the euro gave up nearly 0.5% of its gains, as traders turned back to the US Dollar following a resurgence in demand.
This week brings a series of central bank speeches, with the European Central Bank (ECB) President Christine Lagarde and ECB Executive Board Member Isabel Schnabel set to provide insights on Thursday. Additionally, Friday will be crucial with the release of key consumer and business sentiment surveys from the EU, while the US economy will present updates on Personal Consumption Expenditure (PCE) inflation figures and Gross Domestic Product (GDP) growth. The combination of these data points is expected to provide further clues on the market’s direction.
On the US side, consumer confidence has hit a three-year low, signaling rising concerns about inflation and economic conditions, despite the Fed’s monetary easing. New home sales also declined by 4.7% in August, marking a slowdown in housing market activity. The market’s reaction to these reports pushed investors back into bidding the Greenback higher, triggering the pullback in EUR/USD.
Despite the rejection, EUR/USD remains in bullish territory, trading above the 50-day Exponential Moving Average around 1.1030. Traders are now eyeing Thursday’s Fed speeches, including comments from Fed Chair Jerome Powell, to gauge any further signals that could shift market sentiment.
