If the Eurozone's PMI data improves, the euro could strengthen further against the dollar!

If the PMI data in August shows an improvement in economic activity in the Eurozone and Where to open an account if you want to do foreign exchangealigns with the European Central Bank's gradual rate cuts, the euro's rally against the dollar may continue.

HSBC economist Clyde Wardle pointed out: "Given the generally disappointing data in recent weeks, any signs of an unexpected economic rebound in the Eurozone could boost the euro against the dollar again."

Meanwhile, the dollar's performance is also crucial, with market focus on Federal Reserve Chairman Powell's speech. Karl Schamotta, Chief Market Strategist at Corpay, stated that the market generally expects Powell to hint at a rate cut in September during the Jackson Hole meeting on Friday. With U.S. Treasury yields falling, the dollar has started to retreat this week as traders believe Powell may acknowledge the changing risk balance in the U.S. economy, potentially paving the way for easing policies.

However, if Powell's speech does not meet market expectations, the dollar may rebound.

From a technical standpoint, the downside for the euro against the dollar may be limited. Technical analyst Tanmay Purohit from Société Générale indicated that the recent breakout of the symmetrical triangle by the euro against the dollar suggests increased upward momentum. The daily MACD indicator also supports this view, remaining in positive territory since July.

Currently, the euro against the dollar is approaching the 1.10 level, with the dollar dropping to a seven-month low. Purohit believes: "Although the rally of the euro against the dollar seems somewhat tentative, there are no clear signals of a significant pullback in the short term. The 50-day moving average around 1.0880-1.0850 might act as significant support."

As of 9:11 AM Beijing time on August 21, the euro against the dollar was at 1.1127/28.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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