EUR/USD Price Action:
- EUR/USD rebounded from the 1.1780 support level but failed to hold above 1.1850.
- The pair eased to 1.1820 in the early European session as focus shifts to upcoming U.S. data releases.
Key U.S. Economic Events – September 18
Initial Jobless Claims:
- Forecast: 240K (vs. previous 263K)
- Continuing claims expected to rise slightly to 1.95 million (vs. prior 1.939 million)
Philadelphia Fed Manufacturing Index:
- Expected to rise to 2.3 in September
- Previous reading: -0.3 in August
Federal Reserve Update:
- The Fed cut interest rates by 25bps to a range of 4.00%–4.25%, as expected.
- Forward guidance suggests two additional cuts in 2025 and one in 2026.
- Policymakers are divided on the rate path, with projections ranging from 2.9% to 4.4% for end-2025.
- Fed Chair Jerome Powell called the move a “risk management cut.”
- Powell warned of persistent inflation and said there’s no urgency to cut further, which supported the USD.
U.S. Economic Projections (Fed SEP):
- GDP Growth: Revised to 1.6% (2025), 1.8% (2026)
- PCE Inflation: Projected at 3% (2025), easing to 2.6% (2026)
- Unemployment Rate: Expected to stay at 4.5% in 2025, down to 4.4% in 2026
Eurozone Developments:
- ECB Vice President De Guindos stated current policy is appropriate.
- He noted economic growth may remain subdued in H2 2025, but risks are more balanced.
- Euro ticked up after his remarks.
Latest Eurozone Data:
- HICP (Aug): +0.1% MoM, +2.0% YoY (vs. +0.2% and +2.1% expected)
- Core Inflation: +0.3% MoM, +3.1% YoY (unchanged from July)
Currency Market Summary (Sept 18):
| Currency | % Change vs EUR |
|---|---|
| USD | -0.07% |
| GBP | -0.13% |
| JPY | -0.37% |
| CAD | -0.13% |
| AUD | -0.14% |
| NZD | -1.19% |
| CHF | -0.14% |
- EUR was strongest vs NZD.
- EUR/USD shows modest strength despite Fed hawkishness.
Technical Analysis – EUR/USD:
- Recent uptrend has paused after nearly 2% rally from last week’s low.
- RSI (4H): Above 50 but pulling back from overbought zone.
- MACD (4H): Shows a bearish crossover.
Support Levels:
- 1.1780 (prior resistance, now support)
- 1.1755 (intraday support)
- 1.1700 (trendline + Sept 12 low)
Resistance Levels:
- 1.1878 (Tuesday’s high)
- 1.1935 (127.2% Fibonacci of Sept 11–16 rally)
- 1.2000 (psychological level)
Market Outlook:
- EUR/USD remains in a bullish broader trend, but short-term correction is underway.
- Focus remains on upcoming U.S. labor and manufacturing data for direction.
- Moderate risk sentiment may cap USD strength in the near term.