EUR/USD slides yet clings to 1.1100 as market awaits Powell’s speech

• EUR/USD falls as robust US Treasury yields bolster the dollar, despite Fed signals of potential September rate cuts.
• Mixed US data: Rising jobless claims and PMI results show service growth but worsening manufacturing contraction.
• ECB's Kazaks suggests possible rate cuts with a cautious, restrictive policy approach.

The EUR/USD is set to finish Thursday’s session with losses of over 0.30% after the Greenback was bolstered by high US Treasury yields, even though Fed officials support a rate cut at the upcoming meeting in September. At the time of writing, the major clings around the 1.1100 figure for the third straight day.

EUR/USD hovers around 1.1100 for the third straight day, pressured by higher US Treasury yields

Wall Street ended the session with losses ahead of Fed Chair Jerome Powell's speech at Jackson Hole, due tomorrow at around 14:00 GMT. The Boston and Philadelphia Fed Presidents Susan Collins and Patrick Harker are ready to ease policy, with the former adding that the labor market remains healthy. At the same time, the latter said the Fed must lower rates in a “methodical” way.

Data-wise, US Initial Jobless Claims for the week ending August 17, were higher than the 230K expected, jumped by 232K, and exceeded the previous reading. Regarding business activity, S&P Global PMIs for August were mixed, with the Services expanding above estimates, while Manufacturing PMI contracted deeper, hinting at a more profound economic slowdown.

Across the pond, Eurozone Flash PMIs were mixed, yet the attention was on European Central Bank (ECB) ECB Martins Kazaks, who crossed the wires on Bloomberg. He said he’s open to discussing a rate cut in September yet suggests a gradual approach. He added that policy would remain restrictive despite lowering rates twice and hinted that if inflation goes sideways, they could still cut rates.

Ahead of the day, EUR/USD traders will eye the release of France Business Confidence data. On the US front, Fed Chair Jerome Powell's speech and housing data.

EUR/USD Price Forecast: Technical outlook

From a technical standpoint, the EUR/USD formed a ‘quasi bearish harami’ two-candle bearish chart pattern, yet sellers failed to push the exchange rate below 1.1100, which would’ve paved the way for further downside.

Momentum is still bullish, yet with the Relative Strength Index (RSI) exiting from overbought conditions, a EUR/USD drop below 1.11000 is possible.

In that outcome, the first support would be the August 14 high at 1.1047, followed by a test of the 1.1000 mark. On the other hand, if the pair clings above 1.1100, look for a re-test of the year-to-date (YTD) high of 1.1174, before challenging 1.1200.