Markets are bracing for a pivotal end to the week as the Jackson Hole Symposium takes center stage, with Fed Chair Jerome Powell's speech expected to guide expectations on future policy. Against this backdrop, EURUSD remains under technical pressure, locked in a corrective downtrend, while economic data highlight diverging conditions: the Eurozone shows tentative improvement with manufacturing strength, but confidence remains fragile, whereas US activity is accelerating with robust growth and hiring—yet inflationary pressures raise the prospect of further Fed tightening.
Overview
Markets are bracing for a pivotal end to the week as the Jackson Hole Symposium takes center stage, with Fed Chair Jerome Powell's speech expected to guide expectations on future policy. Against this backdrop, EURUSD remains under technical pressure, locked in a corrective downtrend, while economic data highlight diverging conditions: the Eurozone shows tentative improvement with manufacturing strength, but confidence remains fragile, whereas US activity is accelerating with robust growth and hiring—yet inflationary pressures raise the prospect of further Fed tightening.
Key Economic Events
Friday 17:00 (GMT+3) - USA: Fed Chair Powell Speaks (USD)
Friday All Day - USA: Jackson Hole Symposium (USD)
Chart Analysis
Since peaking at 1.18292 on July 1, EURUSD has entered a corrective phase, characterized by a clear sequence of lower highs and lower lows, a classic marker of a developing downtrend. The initial reversal was signaled by a Hanging Man candlestick, followed by a failure swing as the advance stalled at 1.17882, below the prior peak. The subsequent break of support at 1.15562 confirmed the bearish shift and opened the path for further downside.
Price action remains under sustained pressure, with the pair trading below both the 20- and 50-period Exponential Moving Averages. While a Death Cross, where the 20-period EMA crosses beneath the 50-period EMA, has yet to be confirmed, trend bias remains firmly tilted to the downside.
Momentum indicators support this view. The Momentum Oscillator is anchored below the 100 baseline, highlighting persistent downward pressure, while the RSI continues to hold beneath the 50 threshold, underscoring weak buying conviction.
Key Resistance Levels
Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:
1.16737: The initial resistance level is established at 1.16737, which mirrors the weekly Pivot Point, PP, calculated using the standard methodology.
1.18292: The second price target is set at 1.18292, representing the swing high from July 1.
1.18979: The third price objective is observed at 1.18979, corresponding to the weekly resistance, R3, estimates using the standard Pivot Points methodology.
1.22310: An additional upside target is projected at 1.22310, reflecting the 423.6% Fibonacci Extension drawn from 1.16310 to 1.14456.
Key Support Levels
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.15562: The initial support level is seen at 1.15562, corresponding to the trough from July 17.
1.14776: The second support level is estimated at 1.14776, representing the weekly support, S3, estimated using the standard Pivot Points methodology.
1.13909: The third support level is identified at 1.13909, reflecting the low point marked on August 1.
1.12651: An additional downside target is 1.12651, mirroring the daily high from May 14.
Fundamentals
The Eurozone economy showed signs of improvement in August, with new orders rising for the first time in 15 months. Overall business activity hit its highest level since May 2024, supported by strong growth in manufacturing, which recorded its fastest expansion in more than three years. Services, however, grew only slightly.
Companies continued hiring for a sixth straight month, though most of the gains came from services, while factory jobs kept shrinking. Inflation pressures picked up as input and output prices rose at faster rates, especially in Germany and France.
Despite the stronger data, business confidence weakened, with firms across the Eurozone less optimistic about future growth.
On the other hand, US business activity picked up in August, with growth hitting the strongest pace so far in 2025. Both manufacturing and services expanded, and factory output surged to its fastest rate in more than three years. Companies also stepped up hiring, with job creation among the highest seen since 2022, as strong demand led to backlogs of unfinished work.
However, inflation pressures are building. Tariffs have pushed up costs, and businesses passed those higher costs on to customers, leading to the sharpest rise in selling prices in three years. While business confidence improved slightly, concerns about trade policies and costs remain.
Overall, the PMI data suggest the US economy is running stronger in the third quarter, but with inflation risks high, the numbers point more toward the Federal Reserve considering further rate hikes rather than cuts.
Conclusion
With EURUSD entrenched in a corrective downtrend and fundamentals highlighting a stronger US backdrop versus a fragile Eurozone recovery, market attention now turns to Jackson Hole for policy direction. Powell's remarks will be pivotal in shaping expectations—either reinforcing the case for prolonged Fed tightening or offering hints of a softer stance. Until then, downside risks for EURUSD remain in focus, with price action and momentum firmly favoring sellers.