Technical Analysis

EUR/USD up to highest in over three weeks ahead of European trading

EUR/USD seen above 1.1800 to its highest level since 6 August

With the dollar looking like it is languishing a little to start the day, EUR/USD is marked higher and trading close to 1.1820 ahead of European trading.

The pair is holding at its highest levels in over three weeks and the push above the resistance region around 1.1800-05 (buyers also looking to push past the 61.8 retracement level of the July to August downswing @ 1.1815) puts buyers in a good spot.

The next potential upside target will be the end-July and early-August highs close to 1.1900, should buyers keep up the momentum past month-end today.

Looking at the post-Jackson Hole narrative for the dollar, there is still a lot to ponder going into September trading.

The US non-farm payrolls later in the week will be among the first key risk events but the dollar may be caught in more of a push and pull as the market continues to sort out sentiment with regards to the delta variant, higher inflation and slowing economy (due to supply chain disruptions), while waiting on the FOMC meeting.

In any case, I’d still wager that should the Fed stick with the current taper timeline, the dollar is unlikely to see material weakness in the broader picture.

That sets up an opportunity to fade a push in EUR/USD towards 1.1900, all things being equal, considering the fundamental and technical viewpoints in play.

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