Euro trades cautiously above 1.0800 ahead of key US data

• The Euro maintains optimism above 1.0800 against the US Dollar.
• Stocks in Europe see another positive start to the session.
• The USD Index (DXY) pierces the 104.00 support amidst a mildly offered bias.
• US, German yields kick off the European session in the red.
• Consumer Confidence in Germany expected to worsen in September.

Price action around the Euro (EUR) appears inconclusive against the US Dollar (USD) on Tuesday, motivating the EUR/USD pair to hover around the 1.0800 neighbourhood.

The Greenback also exchanges ups and downs around the 104.00 region when tracked by the USD Index (DXY). Meanwhile, US yields show renewed weakness amidst speculation of the Federal Reserve (Fed) pausing its interest-rate hiking cycle at the September meeting and opting for a quarter-point rate hike in November.

Looking at the broader picture, there is a renewed discourse regarding monetary policy, specifically the Fed's dedication to maintaining a more stringent approach for a prolonged period. This heightened attention stems from the remarkable resilience exhibited by the US economy, even in the face of a slight easing in the job market and declining inflation figures observed in recent months.

Across the pond, internal conflicts among members of the European Central Bank (ECB) governing council are emerging regarding the possibility of extending the restrictive policy stance beyond the summer season. These differences of opinion are contributing to persistent uncertainty around the central bank and act as a source of potential weakness for the single currency.

On the domestic data space, Consumer Confidence in Germany worsened to -25.5 when tracked by GfK for the month of September, while Consumer Confidence in France held steady at 85 in August.

In the US, the Conference Board will publish its Consumer Confidence measure along with the FHFA House Price Index and JOLTS Job Openings.

Daily digest market movers: Euro enters the pre-NFP lull around 1.0800

• The Euro gyrates around the 1.0800 zone against the USD.
• German, US bond yields lose further momentum on Tuesday.
• The US labour market, inflation figures take centre stage this week.
• Japanese jobless rate ticked higher in July.
• Fed’s tighter-for-longer narrative keeps running in the background.
• The probability of a Fed’s 25 bps rate raise in November hovers around 50%.

Technical Analysis: Euro could still slip back to the 1.0760 area

EUR/USD is battling to keep the trade above the key 1.0800 hurdle in quite an apathetic trading session.

Further declines could motivate EUR/USD to revisit Friday's low of 1.0765, ahead of the May 31 low of 1.0635 and the March 15 low of 1.0516. The loss of this level could prompt a test of the 2023 low at 1.0481 seen on January 6 to reemerge.

Occasional bouts of strength should meet provisional resistance at the 55-day Simple Moving Average (SMA) at 1.0965, prior to the psychological 1.1000 barrier and the August 10 high at 1.1064. Once the latter is cleared, spot could challenge 1.1149 from July 27. If the pair surpasses this region, it could alleviate some of the downward pressure and potentially visit the 2023 peak of 1.1275 seen on July 18. Further up comes the 2022 high at 1.1495, which is closely followed by the round level of 1.1500.

Furthermore, sustained losses are likely in EUR/USD once the 200-day SMA (1.0807) is breached in a convincing fashion.