EUR/USD Maintains Bullish Bias Above Key 200-Day Moving Average Ahead of Jackson Hole

EUR/USD is trading virtually flat on Thursday, moving into a consolidation phase after reaching a three-month peak of 1.1711 earlier this week. The fundamental and technical environment continues to favor the Euro, though momentum indicators suggest early signs of cooling as the currency pair attempts to establish support just above the 200-day Simple Moving Average (SMA).

At the time of writing, EUR/USD is hovering around 1.1651. Federal Reserve Chair Kevin Warsh’s address at the Jackson Hole Symposium on Friday stands out as the key risk event, with the potential to shape the US Dollar’s next directional move and, consequently, the trajectory of EUR/USD.

ECB Tightening Expectations Bolster the Euro

Strategists at Brown Brothers Harriman observe that “EUR/USD is directionless around 1.1650, with the 200-day moving average at 1.1632 offering key support,” characterizing the market as consolidating rather than trending. They note that “the swaps curve has virtually fully priced in a 25bps ECB rate hike to 2.50% at the next September 10 meeting and a total of 60bps of tightening over the next twelve months,” describing this policy path as “reasonable and supportive of EUR.” According to their analysis, the combination of “Eurozone inflation is above target, and leading indicators point to stronger economic activity” strengthens the case for further ECB tightening and supports the single currency at current levels.

Technical Analysis

From a technical standpoint, EUR/USD has sustained a steady uptrend since the beginning of the month, establishing a pattern of higher highs and higher lows while reclaiming the critical 50-day, 100-day, and 200-day Simple Moving Averages (SMAs), which are clustered between approximately 1.1480 and 1.1630.

Momentum indicators remain constructive, though upside momentum is showing some signs of moderation. The Relative Strength Index (RSI) has retreated to around 65 after briefly entering overbought territory, while the Moving Average Convergence Divergence (MACD) holds in positive territory despite a fading green histogram. Meanwhile, the Average Directional Index (ADX) reading above 40 indicates a robust underlying trend rather than a corrective move.

On the upside, immediate resistance is located at the 1.1700 psychological level, followed by 1.1800. On the downside, the 200-day SMA near 1.1633 provides initial support, followed by the 100-day SMA around 1.1574 and the 50-day SMA near 1.1484. A more substantial pullback could expose the 1.1350 zone.

(The technical analysis of this story was written with the help of an AI tool.)

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