Daily Analysis EURUSD - 31 Aug 2023

The EUR/USD climbed to two-week highs at 1.0947 before retracing slightly, yet it remains comfortably above 1.0900. The overall bias favors upside movement due to the US Dollar's corrective shift. Recent US data pressured the Greenback, while Eurozone inflation hints at potential European Central Bank (ECB) tightening.

Germany's annual inflation dipped from 6.2% to 6.1% in August, staying elevated. Spain's rose from 2.3% to 2.6%, expected, and core rate above 6%. Despite the downward trend, high inflation opens the ECB tightening possibility. August saw drops in consumer and business confidence. Eurozone Consumer Price Index data comes on Thursday.

US data, released Wednesday, showed lower-than-expected private payroll growth at 177,000, versus 195,000 consensus. Q2 GDP was also revised down, impacting the dollar's correction. More data is due: Core PCE Price Index and Jobless Claims on Thursday, Nonfarm Payrolls on Friday.

Despite weak data, US fundamentals outshine the Eurozone's, possibly capping EUR/USD upside.

The EURUSD continued to rise until 1.0947, where the 100MA daily acted as a resistance level. Today, the pair is awaiting data from both economies. The next resistance could be around 1.1000, and the support is at 1.0850.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0850	1.0800	1.0700