EUR/USD

The Euro was bearish last Thursday, following the trader's sentiment around the core inflation print for the Euro region. The headlines had opposite readings, stating a subtle increase. However, core inflation printed 5.3%, which coincides with analysts' predictions. Nevertheless, it recorded a lower percentage compared to the previous month of 5.5%.

Additionally, ECB policymakers recommend an additional careful strategy that will be used by the governing committee for next month's central bank conference. In the Jackson Hole concluded forum, ECB delegates stated that aggressors within the delegation have curbed their earlier outlook on the group's errors. A balance has been created for either a hold or a hike situation.

Separately, US PCE data stated an increase in the previous month's year-to-year comparison, which tallied with the market sentiments for both news headlines and core inflation. 

Markets are looking forward to the NPF reports scheduled for release today. This has kept the market in a more pensive mood than ever, especially with the outlook on the lower-impact jobs data.  

EUR/USD IS VULNERABLE

Last Thursday, EUR/USD was bearish following the decline of the EU core inflation, while the US PCE maintained its high level. The EUR/USD price crossed above 1.0910 before declining and losing all profits. A new support level was created at 1.0831.

EUR/USD declined earlier by 15 pips before maintaining its hold. Since the beginning of the European session, the currency pair has been on a continuous downward trend.  However, lately, the pair has glided back up a little, with an attempt to cross above the 1.1000 price mark. On Friday morning there was a little pullback with traders looking forward to the outlook on the Euro Area inflation report. However, there is still an uptrend possibility, although a price direction is difficult to detect at this point.  

It is difficult to pinpoint the next price direction of the EUR/USD;  this is because both currencies appear to be vulnerable. The dollar is weak, following a weak GDP outperformance and early indications of a softer jobs market. On the Euro side, there is the bearish trend risk, with decreasing inflation, and growth issues which is reflected in the ECB members. This is bound to affect their rate decision next month.  

GBP LACKS A BULLISH CATALYST

Markets show high sensitivity to data reports this week. The US Jobs data threw the USD into a bearish trend over the last 3 trading days. The Euro is also affected negatively by the EU inflation report. The Euro is on a bearish trend amid core inflation decreasing in August as predicted by analysts. UK data reports have been scarce, which means the currency has no catalyst to stimulate a bullish price reversal.

LACK OF CATALYST AND A CHANGING US ECONOMIC LANDSCAPE STIMULATES GBP

As stated earlier in the previous paragraph, the GBP lacks a stimulating catalyst as the UK data reports have been scarce. Markets are more drawn to the possible reverse of the US economic landscape. Fewer people have been resigning from their Jobs, and Job opportunities have declined over the last 3 years. Additionally, the ADP survey on the creation of private jobs came in at 177,000, and analysts estimated 195,000.

The GBP traded a little bearish on Thursday, With Markets anticipating the US PCE, and NFP on Friday. A higher PCE report will strengthen the dollar, and help gain back all losses encountered this week. 

GBP/USD traded bearish below 1.2676 with its support level recorded at 1.2585. The bearish trend has continued after the price referenced from its long-term bullish trend. With no significant catalyst in view, the market is trading ranges.