German business activity data exceeded analysts’ expectations, providing some support to the euro. In August, the IFO business expectations index rose from 90.8 to 91.6, compared to a forecast of 90.2. The IFO business climate index increased from 88.6 to 89.0, beating the forecast of 88.7. The current situation index was recorded at 86.4, slightly below expectations of 86.7 and down from 86.5 previously.
Meanwhile, analysts pointed out that the details of the July trade agreement between the EU and the U.S., which introduced a 15% tariff on European goods, could negatively impact the bloc’s economy and industrial sector. According to experts, while the deal brings short-term stability and clearer trade rules, its implementation may prove difficult. German Chancellor Friedrich Merz questioned how cooperation with the U.S. could continue if Washington is no longer willing to follow World Trade Organization (WTO) rules. Hungarian Foreign Minister Péter Szijjártó argued that the agreement benefits only the U.S., not the EU.
The U.S. dollar remains stable, with the USDX at 98.30. Since the beginning of the week, investor focus has been on President Donald Trump’s attempt to dismiss Federal Reserve Board member Lisa Cook. She has stated she will challenge the decision in court. Her lawyer described the dismissal attempt as based only on a recommendation letter without further evidence. The Federal Reserve also released a statement noting that Cook has held her position for over 14 years and will continue to be considered an active member unless a court issues an official ruling. For now, officials believe she can still participate in the September 16–17 meeting, with removal only possible if sanctioned by the courts.
Support and Resistance Levels
On the daily chart, the pair continues its correction, approaching the strong support line of the ascending channel with boundaries of 1.2150–1.1530.
Technical indicators remain uncertain. Fast EMAs on the Alligator indicator are aligned with the signal line, narrowing the fluctuation range, while the AO histogram forms corrective bars in the buy zone.
- Support levels: 1.1510, 1.1270
- Resistance levels: 1.1720, 1.1940
Trading Scenarios
Long positions may be considered if the price consolidates above 1.1720, targeting 1.1940. Stop-loss at 1.1640. Horizon: 7 days or more.
Short positions may be considered if the price consolidates below 1.1510, targeting 1.1270. Stop-loss at 1.1600.
Scenario
- Timeframe: Weekly
- Recommendation: BUY STOP
- Entry Point: 1.1720
- Take Profit: 1.1940
- Stop Loss: 1.1640
- Key Levels: 1.1270, 1.1510, 1.1720, 1.1940
Alternative Scenario
- Recommendation: SELL STOP
- Entry Point: 1.1510
- Take Profit: 1.1270
- Stop Loss: 1.1600
- Key Levels: 1.1270, 1.1510, 1.1720, 1.1940