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• In the wake of the negative U.S Non-Farm Employment Change numbers, yet another volatile shift in near-term sentiment hit the EUR/USD. A high of nearly 1.17600 was seen on Friday, this before the currency pair went into the weekend around 1.17155.
• Behavioral sentiment remains cautious as financial institutions are being confronted with weakening U.S jobs data, while still grappling with fears of inflation developing mid-term.
• Narrative is driving Forex and the EUR/USD is not immune to the noise being heard and causing reactions via large players.
• The pair EUR/USD is once again above the 1.17000 level based on the notion that the U.S Federal Reserve will certainly cut its interest rate by 25 basis points on the 17th of September.
• The less than anticipated job numbers from U.S this past Friday, raises the suspicion the Fed will have to cut interest rates again in October by another 25 basis points.

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1.17000 Inflection Point in the EUR/USD

The entire month of August saw the 1.17000 level as a key target. Day traders should take a look at a one month chart and consider what took place as financial institutions leaned into a stronger EUR/USD, but continued to react with selling when they got nervous. Friday’s results which took the currency pair back above the important fixture and this may prove to be important.

While inflation worries continue to hamper outlooks of some analysts of the U.S economy because of concerns regarding tariff implication over the mid-term, the reality is that weaker jobs numbers and tame inflation up till now must be taken seriously. It appears the U.S Federal Reserve led by Jerome Powell will have to cut the Federal Funds Rate this month and suggest via its FOMC Statement that outlook over the next couple of months is dovish. Meaning that the 1.17000 level in the EUR/USD might actually become sustained lower value in the coming weeks.

Coming Concerns and Attractions for the EUR/USD

The European Union finds itself in a rather lackluster economic sphere. Germany’s economy remains lackluster, France is within a troubling fiscal situation, and inflation numbers from Europe have been slightly higher than anticipated.

• This means the European Central Bank is in a tough position regarding outlook too.
• The ECB like the Fed may remain captivated by the fear of inflation and not want to cut borrowing until they see evidence of tranquility in growth prospects and price indexes, but this might not be easy to attain.
• Economically, central bankers remain in a difficult place in the European Union and U.S.
• Which likely will continue to create rather strong headaches for financial institutions trying to create outlook for the EUR/USD mid-term, meaning short and near-term may remain rather difficult.

EUR/USD Weekly Outlook:

Speculative price range for EUR/USD is 1.16850 to 1.17970

Yet, the fact that folks are likely going to be more confident the Fed must cut interest rates more aggressively may help bolster the EUR/USD moving forward. The highs of nearly 1.17600 may look too aggressive as a target, but the 1.17400 to 1.17500 levels may feel like goals to some larger players in the coming days. When the EUR/USD opens for trading tomorrow if the 1.17100 level is sustained and price action shows signs of movement upwards, traders may believe another trend higher is going to develop.

The Fed should have been more aggressive cutting interest rates a handful of months ago, this might have prevented some of the economic headwinds now developing. The fact that some financial institutions perceive that the Fed is acting too slowly and that genuine concerns remain about the mid-term outlook due to fears about inflation occurring will cause problems for the EUR/USD. The EUR/USD has traded within a range which has continued to test support levels after high values could not be sustained. The question for day traders in the EUR/USD is where durable lower prices will be seen in the coming days. Looking for upside in the coming week if and when the 1.17000 level comes into sight might be tempting.

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