The EURUSD currency pair, currently trading at 1.08822, is seeing increased strength near the 1.0880 level due to the weakening of the USD.

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• EUR/USD gains momentum near 1.0880 amid the USD weakness.

The pair currently trades last at 1.08822.

The previous day high was 1.0822 while the previous day low was 1.0794. The daily 38.2% Fib levels comes at 1.0811, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0805, expected to provide support.

The EUR/USD pair surges above the 1.0880 mark during the early Asian session on Wednesday. The weaker US dollar and a sharp drop in US Treasury yields drags the Greenback lower across the board. The major currently trades around 1.0880, gaining 0.01% on the day. Meanwhile, the US Dollar Index (DXY) breaks below the key support level at 103.50 while the 10-year yield fell from 4.20% to 4.12%, the lowest level in two weeks.

On Tuesday, the US Conference Board’s (CB) Consumer Confidence Index for August dropped to 106.10 from 114.00 in July, below the market consensus of 116.0. In addition, the US JOLTS Job Openings for July decreased to 8.827M versus 9.165M prior and against the 9.465M expected. The figure showed the lowest reading since March 2021. Finally, the S&P/Case-Shiller Home Price Indices improved to -1.2% YoY versus -1.7% prior and -1.2% market expectations. In response to the data, the USD loses momentum significantly and faces its most significant decline in over a month.

The labor market in the US is easing, but not as the Federal Reserve (Fed) expected. The market anticipated that the Fed will push back rate hikes until the September meeting. According to the CME’s FedWatch Tool, markets are pricing in a 16% chance of a rate hike versus 20% prior. This, in turn, exerts some selling pressure on the USD.

On the other hand, the German Gfk Consumer Confidence Survey for September came in at -25.5 versus -24.6 prior and worse than the expectation of -24.3. Meanwhile, the Eurozone money supply fell for the first time since 2010 as private sector lending slowed and deposits fell. The latest data might convince the European Central Bank (ECB) to pause interest rates at its next meeting on September 14.

Looking ahead, the US ADP private employment and estimate of Q2 Gross Domestic Product (GDP) data will be due on Wednesday, followed by the US inflation data on Thursday and the highly-anticipated Nonfarm Payrolls on Friday. On the EU docket, the preliminary Spanish and German Consumer Price Index (CPI) for August will be released as well as the ECB Meeting Minutes. Traders will take cues and find trading opportunities around the EUR/USD pair.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0884 at the time of writing. Pair opened at 1.0819 and is trading with a change of 0.6 % .

The pair is trading below its 20 Daily moving average @ 1.091, below its 50 Daily moving average @ 1.0975 , below its 100 Daily moving average @ 1.0927 and above its 200 Daily moving average @ 1.0806

The previous day high was 1.0822 while the previous day low was 1.0794. The daily 38.2% Fib levels comes at 1.0811, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0805, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.0801, 1.0783, 1.0772
• Pivot resistance is noted at 1.083, 1.084, 1.0859

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