Key Moments
- EUR/USD trades around 1.1630 during the Asian session, supported by a weaker US Dollar following comments from Fed Governor Christopher Waller.
- Fed’s Waller signaled he is “finally seeing some signs of disinflation,” while keeping the door open to a potential rate hike if inflation data surprises to the upside.
- Market participants await the August US Nonfarm Payrolls release at 12:30 GMT, a key event for near-term direction in the currency pair.
EUR/USD Steadies After Dollar Sell-Off
The Euro is holding its ground against the US Dollar, with EUR/USD trading near 1.1630 in Friday’s Asian session and preserving the prior day’s advance. The pair strengthened sharply on Thursday as the US Dollar came under heavy selling pressure in response to dovish-leaning remarks from Federal Reserve Governor Christopher Waller.
At the time of writing, the US Dollar Index (DXY) – which tracks the performance of the Greenback against a basket of six major currencies – is hovering close to Thursday’s low near 99.00, reflecting the softer Dollar tone.
Fed’s Waller Signals Disinflation but Keeps Options Open
Speaking at the Reuters NEXT Newsmaker event on Thursday, Fed Governor Waller noted that he would be inclined to back keeping the policy rate unchanged at the September meeting if the August inflation data shows continued progress toward the central bank’s 2% target.
While he did not exclude the possibility of another rate increase this month should inflation readings come in stronger than expected, his observation that he is “finally seeing some signs of disinflation in recent data” suggested a growing willingness to support a steady policy stance.
Markets Await US Nonfarm Payrolls
Attention now turns to the upcoming United States Nonfarm Payrolls report for August, a key data release that investors will parse for signs of labor market strength and potential implications for Fed policy. The NFP figures are scheduled for publication at 12:30 GMT.
EUR/USD Technical Picture
On the daily chart, EUR/USD is trading at 1.1630, maintaining a position above the 100-day simple moving average (SMA) at 1.1564. This technical configuration keeps the near-term outlook mildly bullish, as recent gains remain underpinned by this key trend indicator.
The Relative Strength Index (RSI) stands around 57, pointing to positive momentum without indicating overbought conditions. This suggests that buyers retain control while still leaving room for further upside.
| Indicator | Level / Signal | Implication |
|---|---|---|
| Spot EUR/USD | 1.1630 | Holds recent gains |
| 100-day SMA | 1.1564 | Initial support and bullish bias above this level |
| RSI (daily) | 57 | Positive momentum, not overbought |
| Upside reference | August high at 1.1720 | Potential target if bullish move extends |
On the downside, initial support is located near the 100-day SMA around 1.1564. A decisive break below this area would open the door to a deeper retracement toward prior daily lows. On the upside, if buying interest persists, the pair may look to challenge the August high at 1.1720.
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