Daily Analysis EURUSD - 18 Aug 2023

Eurostat is set to release the final Consumer Price Index for July, with the annual rate expected to remain steady at 5.3%, holding no surprises. Additionally, Eurostat will provide a report on the Construction Output for June.

In the US, the economy continues to show resilience, particularly in the Labor market, with solid economic data indicating ongoing strength. Inflation pressures persist, as the latest retail sales data confirms heightened price pressures.

The recent FOMC minutes and statements from various FED members underline the central bank's persistent hawkish stance. Despite the consistent slowdown in the Consumer Price Index over the past months, the FED remains attentive to potential inflationary pressures. This vigilance is evident, even though the downward trend in the CPI has been evident. Given the prevailing macroeconomic conditions, the market is beginning to factor in the possibility of a final interest rate hike within this year.

The EURUSD is heading towards its initial support at 1.0850, followed by 1.0800 where the 200MA and the descending parallel of the bullish long channel can be found.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850